Can AI replace software?

The podcast explores whether AI can replace software, addressing recent market concerns about the business models of software vendors. Steve Bersey, Head of US Technology Research at HSBC, argues that the market's reaction is overdone, explaining that enterprise-class software is not easily replaceable by AI due to its need for deterministic systems, unlike AI's undeterministic nature, which can produce errors unacceptable in critical applications like banking. He highlights the issue of data availability, noting that while AI can train on public data for tasks like image creation or legal analysis, enterprise software relies on highly protected, non-public data. Bersey suggests AI will expand the total addressable market (TAM) for enterprise software, driving revenue growth by increasing efficiency and value creation, with 2026 as a kickoff year for monetization.