Once upon a time, software ruled the world. Now, AI is here to consume what’s left. The traditional model of computing — where apps dominated, marketplaces controlled access, and platforms took their share — is unraveling. What’s emerging is an AI-first world, where software functions aren’t confined to apps but exist as dynamic, on-demand services, accessible through AI-native interfaces.
For decades, computing operated like a digital filing cabinet. Applications were like rigid, self-contained folders, each isolated from the other. Need to check the weather? Open an app. Booking a flight? Another app. Paying a bill? Yet another. The result was a fragmented user experience, constantly jumping between siloed apps, each competing for space on the home screen.
Generative AI shatters this model. Instead of navigating through separate programs, users will interact with intelligent agents that retrieve, process, and generate responses in real-time — no apps needed. Ask an AI assistant to manage travel, optimize finances, and recommend a workout? Done. Need legal documents reviewed, groceries ordered, and today’s news summarized? Seamless. The new interface is no longer an app; it’s conversational, predictive, and frictionless.
However, this AI-driven world is still in development. Apps aren’t vanishing overnight, but their dominance in computing is slipping. AI doesn’t care about rigid software silos. It rewires the experience, making software modular, dynamic, and deeply integrated. The concept of opening and switching between apps? Soon, it will seem like an outdated idea.
The Incumbent Risk: Traditional Marketplaces Are on the Clock
For years, digital storefronts and walled-garden marketplaces were unbeatable. Control the distribution, tax every transaction, and rake in billions. But what happens when apps become… unnecessary?
The rise of AI-driven interactions threatens the entire app distribution economy. If users rely on AI-native systems instead of downloading separate software, traditional software marketplaces could become obsolete. AI eliminates the middleman. The economic model shifts from app monetization to AI-driven service layers, where interactions are seamless, personalized, and beyond the reach of legacy platforms.
Two unavoidable consequences:
- Revenue Disruption: No more 30% cuts on app sales or in-app purchases. If AI handles transactions autonomously, the app store economics collapse.
- Platform Disintermediation: AI is cloud-native and hardware-agnostic. Control over digital ecosystems diminishes as software becomes an ambient service, rather than a gated experience.
The new question is: Who owns the AI-powered service layers? Because whoever does will own the next trillion-dollar industry.
The New Power Structures: AI Models and Vertical AI Solutions
AI consuming applications creates a clear power vacuum. Where does the value shift? Simple: control over:
- AI Models: The entities developing the most advanced foundational models will define the core intelligence layer.
- User Interface and Personalization: Whoever builds the most intuitive, AI-native interfaces will dominate user engagement.
- Data and Integration: AI thrives on access to real-time, proprietary data. Whoever owns the data pipelines controls the insights, the intelligence, and, ultimately, the economy.
But there’s another force at play: Vertical AI Solutions.
Currently, most large language models (LLMs) are like a Swiss Army knife — versatile but overwhelming. Users don’t want to “figure out” AI. They want solutions tailored to specific industries and workflows. Think: legal AI drafting contracts, financial AI managing investments, creative AI generating content, scientific AI accelerating research. Broad AI is interesting. Vertical AI is valuable. Right now, LLMs are too broad, abstract, and unapproachable for most users. A blank chat box is not a product; it’s a homework assignment. For AI to replace apps, it needs to be invisible, seamlessly integrated into daily workflows without requiring users to think about prompts, settings, or backend functions.
The companies that succeed in this next wave will not just build better AI models; they will craft better AI experiences. The future of computing isn’t about one AI doing everything. It’s about specialized AI systems that know exactly what users need and execute flawlessly.
The Entire Software Stack Is Being Rewritten in Real-Time. What Replaces the Old Model?
- Microservices Over Apps: Forget bloated applications. Future software will be modular, on-demand, and AI-callable. Booking a trip? The AI agent sources flights, hotels, and rental cars in real-time without ever opening an app.
- AI-Powered Marketplaces: The next software marketplace isn’t an app store. It’s an AI-native services marketplace, where users subscribe to function-specific AI agents rather than downloading static software.
- AI-as-a-Service: Instead of selling standalone apps, developers will build “skills” or “agents” that integrate into a broader AI ecosystem, monetized through subscriptions or usage-based pricing.
The Inevitable Disruption
This is not an evolution; it’s a revolution. Generative AI isn’t just another technology layer; it has the potential to consume the entire software industry from the inside out. The old software model was built on scarcity: control distribution, limit access, charge premiums. AI obliterates this. The new model is fluid, frictionless, and infinitely scalable.
The platforms and businesses that fail to adapt could find themselves relegated to the history books, joining those who dismissed the internet, mobile, and cloud before it.
AI isn’t just the next wave in software; it’s the wave that sweeps everything before it. The only question left is: Who will ride it, and who will get drowned?
