Software And Services Companies: Will Generative AI Eat Their Lunch?

GAI is a double-edged sword for S&S. Companies without GAI applications find that GAI crowds out their offering from IT budgets. In contrast, companies with GAI offering find that high inference costs make new products less lucrative than the cloud-subscription model that has propelled their margins to all-time highs. The effect of DeepSeek on the industry is generally positive, as it will help it lower costs of GAI-based software products.