AGI's Impact on Tech, SaaS Valuations

Thought experiments on how AGI affects SaaS companies of all shapes and sizes

Back in March 2023, I wrote that the 1) rapid advancement of AI can be bearish for the median tech company, and 2) investors should bet on greater dispersion of fates among tech companies.

The core argument was this. A stock’s value ultimately rests on 1) discount rate, 2) projection of future free cashflow, and 3) multiple. Discount rate is a function of risk premium (RP), which should go higher as AI advances, thus bringing valuations lower.