AI is the most talked about and probably most valuable tool in IT now. And like most tools, it was created to add value but can also be used in destructive ways.
A common narrative now is that AI is destroying the software industry, as new major AI advancements spark selloffs of software company shares. AI is also used to aid cybersecurity professionals, while at the same time helping cyber criminals.
So is AI a force of good or of destruction in IT? You’ll find a lot of opinions on AI’s impact on software, on both sides. Sometimes from the same people.
"There's this notion that the software industry is in decline and will be replaced by AI," Nvidia CEO Jensen Huang said during a Cisco event this month. "There's a whole bunch of software companies whose stock prices are under a lot of pressure because somehow AI is going to replace them. It is the most illogical thing in the world."
An interesting take, considering Huang has been frequently quoted as saying "Software is eating the world, but AI is going to eat software."
You don’t have to look hard to find those who agree with the last part of Huang’s statement about AI eating software. Stories such as Why Agentic AI will obliterate legacy SaaS, cybersecurity, and networking giants, AI is Killing B2B SaaS and Software companies face higher borrowing costs, tougher scrutiny as AI threatens businesses all make cases for why software and SaaS are endangered.
In a commentary story on SC Media, Airrived CEO Anurag Gurtu writes that “a seismic shift has taken place, one so profound that only a handful of companies will survive in its wake. This isn't incremental improvement: it’s a foundational rewrite of how software, infrastructure, and networks operate, powered by GPU-driven reasoning, ultra-fast inference, collapsing cost curves, and agentic intelligence.
“Legacy SaaS stacks, bolt-on AI, and traditional cybersecurity castles are structurally incapable of navigating this transition. And we have benchmarks and analyst foresight to prove it.”
Others push back against that notion. In a story titled The SaaSpocalypse mispricing: Why markets are getting the AI-software shakeout wrong, SiliconANGLE Media founder John Furrier counters: “Everyone’s suddenly talking about a SaaSpocalypse, but that framing of artificial intelligence disrupting software-as-a-service misses the point.
“What’s playing out isn’t collapse, it’s a reshuffle — AI is changing how work gets done, and investors are struggling to separate real disruption from headline noise.”
Google CEO Sundar Pichai, whose company plays on both sides of the AI and SaaS fields, maintains AI has opportunity for both. “I definitely see we have very, very good SaaS customers who are leaders in their respective categories. And I think [AI] is an enabling tool, just like it has been an enabling tool for us across our products and services,” Pichai said on Google’s recent earnings call. “I think the companies who are seizing the moment, have the same opportunity ahead.”
It’s not only software supposedly under fire from AI. Omdia analyst Matthew Ball this week wrote on LinkedIn, “The latest hyperbolic ‘AI will kill an industry’ storyline swept into cybersecurity last week after Anthropic introduced Claude Code Security as a limited research preview, triggering a decline in security vendor stocks.
“The headlines make for a compelling narrative. This is just the start of its broader push into B2B ecosystems. But in cybersecurity, the near‑term impact is being overstated relative to the fundamentals.”
The AI threatening cybersecurity theme is drawing enough attention that Palo Alto Networks CEO Nikesh Arora addressed it during his company’s earnings call.
“I’m still confused why the market is treating AI as a threat to … cybersecurity,” Arora said. “Despite the current sentiment about AI and software, we firmly believe that security is an enabling layer that allows innovation to move forward safely and at scale.”
These competing narratives are a big reason why AI will be a hot topic at the Channel Partners Conference co-located with MSP Summit April 13-16 in Las Vegas. It’s a topic partners must master to become the trusted advisors that customers – particularly SMBs – seek when dealing with AI.
“The traditional vendor playbook is getting shaken up, particularly with the advent of AI and how SMBs are using it,” said Bob Takacs, managing partner at Ascot Morgan, a research and advisory firm that specializes in SMB IT. “From an SMB perspective, trust is really becoming a bigger currency of modernization. MSPs aren't just deploying AI tools—they're being asked to guide clients through the risk. There's more expectation from SMBs that MSPs deliver outcomes, resiliency, and real help, not just products.
“MSPs that can upskill SMBs with AI—rather than just deploying tools—will win more deals. SMBs are definitely deploying AI now, it's exploded compared to two or three years ago. MSPs that focus on the human element and help SMBs learn will provide the most value.”
In a story for The MSP Summit site on How IT Services Providers Use AI to Boost Customer Engagement and Grow Revenue, Omar Fouad and Christina Politi of the Alexander Group write “the rapid pace of AI innovation introduces new challenges. In an industry that’s already faced significant technological changes, leading IT services providers position themselves as technology advisors at the forefront of industry shifts.”
So regardless of whether AI is eating other technologies or not, there is still a place for MSPs to thrive.