Is Every Company Now an AI Company?

Remember a few short years ago when we frequently heard the refrain, every company was now a tech company?

Do we need to update that axiom to every company is now an AI company?

Or is that just more fuel for the never ending AI hype cycle?

Hi, I’m Courtney Baker and this is AI Knowhow from Knownwell, helping you reimagine your business in the AI era.

As always, I’m joined by Knownwell’s CEO, David DeWolf, Chief Product and Technology Officer, Mohan Rao, and NordLite CEO, Pete Buer.

We also have the first part of a two-part interview with Max Gabriel on why AI is eating sass and what that means for you.

But first, buckle up for my discussion with David and Mohan on if every company is now an AI company.

David, Mohan, welcome back.

Today, I have a question for you.

I’ve been hearing a little rumbling lately of kind of this idea that every company now is an AI company.

And it reminds me of, you know, just a few years ago, you know, people would say every company is a tech company.

It feels like AI is no longer something only companies like ours are thinking about, or tech giants are talking about.

It is really becoming more of the heart of a lot of companies across industries.

So I want to dig into that.

Is that a reality or is that just the hype, or is that just really a select few people that are kind of making up a larger, making it seem like everybody is there?

So curious to hear what you two think.

I think we have to start by just framing the question.

I mean, do we mean every company has arrived or every company needs to begin their journey is one question.

And then I think it reminds me of the period of software is eating the world and everybody’s a software company, right?

The brutal reality is every company a finance company?

Is every company a spreadsheet company?

Is everybody, you know, I think it’s the same type of thing.

I think what people are trying to say is that every business should be embracing artificial intelligence as a standard way of doing business.

I think that’s the fundamental belief that people are espousing.

And to go back to the basic questions, no, I don’t think that’s reality yet.

There’s plenty of companies that aren’t there.

Do I think ultimately we need to get there?

Yes.

Just like every business is now an electricity company, right?

We all turn the lights on in the morning because that’s just the way we are.

The same thing is going to happen, right?

And we go through these waves every 10, 20 years where there’s a new standard and the innovation is such a breakthrough that it changes the way we do business.

Well, yes, I think we’re there.

I think this is one of those fundamental technologies.

I think it will proliferate.

I think it will become ubiquitous.

I think it will be the de facto that we all have to embrace it.

But that does not mean that we’re all developing our own LLS, right?

It does not mean that we are at its heart, the same thing everybody is the same thing that OpenAI is, or the same thing that even Knownwell is, right?

There are different types and different levels and different degrees to which artificial intelligence is core to your business versus core to who you are as a company versus core to your products.

And I think in order to have a good conversation about this, we have to tease all of those apart and acknowledge that they’re different.

Yeah, I agree with that.

Even there, I would say there are vast sectors that will not be touched by AI.

So let’s take those things out, right?

For example, skilled trade and manual labor.

That’s a big part of the GDP, high trust situations like counseling or whatever, right?

So you can have AI marginally.

You can’t use counseling, though, because Pete and I just did a news story.

I don’t know if it’s aired yet, about counselors, actually, like the results of counseling with an AI counselor better than physical counselors.

Okay.

I will take that out then.

Let’s edit it out.

And I’ll pause it.

It’s worthy of a discussion of whether that’s good or bad.

Yeah.

Long-term impacts of that are a big question.

That’s so true.

Where I was going with this was when there is high trust required, things that are uniquely human.

So AI really has marginal utility in those sectors.

So let’s take those things out.

So let’s now talk about the rest of the world.

So I agree with what David said.

So value creation is still emerging.

It’s in the very, very early phase.

You can call it the early majority phase.

There is a difference between using tools versus using it as a platform for business transformation.

That is still emerging.

So yes, every company with the caveats that we already discussed can be an AI company and what they use it for widely differs and this is gonna go on for the next 15 plus years.

But, you know, it’s like David said, is every company an electricity company?

Is every company a computer company?

Yes.

So AI will be that.

You know, I think it’s really interesting because today I was on a call with an executive at a marketing firm.

They do marketing specifically for professional service firms and they had recently had a mastermind for, you know, the leadership of all these different professional service firms to talk about AI.

And the big takeaway was that so many of them actually are still wrestling with concern, some fear, you know, like just trying to figure out.

And of course, I don’t know if that’s, you know, amplified by some uncertainty in the market right now.

Other things maybe to be anxious on and, you know, AI gets the, you know, the brunt of it because it’s an easy scapegoat right now.

I’m not sure.

But I think it’s interesting to think about that and figure out, you know, is there a kind of curve to this?

Is it just when we hear these things, like is everybody an AI company?

Is that just the small few that are kind of, you know, to really get what I’m getting to add is, is there really a way to kind of get our, get a pulse of how companies are doing as they apply AI right now?

I think there are two parts of that question, Courtney.

I think the first one we should just explicitly call out, which is this is not going to be a fast transition, right?

I think sometimes we get a little bit fooled because the adoption of AI on the personal level has just taken off, right?

The way that chat GBT is really what started it was so quickly democratized and just sped through society, right?

Has everybody thinking that this is moving really fast?

The reality is artificial intelligence, core technology, neural networks have been around for decades.

And that, yes, there have been advances that have allowed it to be democratized.

But the adoption of that in business, I think, is not going to happen overnight.

Will there be uptake very quickly?

Absolutely.

Will there be almost every single competitive organization?

Will they encourage employees to experiment and use this tool or that tool?

Absolutely.

But wholesale transformational change does not happen overnight.

And organizations, from what I’m seeing, aren’t getting their heads around it quickly.

In fact, I think what I see is a lot of encouragement from employees to experiment at the ground level, but not necessarily enterprise wide platforms being cascaded and changing the way businesses operate, which ultimately is where we’re going, right?

Ultimately, there will be an intelligence hub, a brain that runs the organization and facilitates and orchestrates all of the orchestration that happens in the enterprise.

We’re nowhere near that yet.

And so I think that timing question is a big one that we just have to address and be really candid about.

This isn’t going to happen over the next 18 months.

And in the language that we’ve used before, I think at an individual execution level, you see a lot of experimentation going on, but more at an operational teams working together, I think the value creation is still emerging.

So on one side, there’s a faster option of individuals using the tools, but being AI driven as a business is something that is still playing out and has many more innings of playing out happening to come.

So it seems like what I really hear you two saying is this question of, is every company now an AI company?

Maybe isn’t the right question that we should be thinking about, or even as we hear it, we shouldn’t start having heart palpitations when our company, we wouldn’t say, oh yeah, we’re here, we’ve arrived, we’ve got it all checked off, but rather we should use it to ask ourselves, what does being an AI company look like for us?

And that mindset of like, what do we do this week, this month, this year to move us closer towards that goal?

I think that’s right.

That really resonates with me, Courtney.

I think making it a very personal question and really applying it to your business matters.

I think every single business is finding a different leverage point.

Obviously, if you’re Open AI, if you’re Google, if you’re Microsoft, what that means to you is fundamentally different than what it means to a professional services organization.

And professional services organizations need to be grappling with the fact that for the first time, we can actually foresee digitizing knowledge work.

It’s one of the very few industries that when almost totally disrupted by the digital transformation age.

Well, now we are at the AI age, and I think we are going to see that transformation.

And so if I am in the professional services space, I am looking very hard at both from a delivering my service perspective and from an operational perspective, how do I leverage AI in our business to transform and to accelerate and to move into this space so that I become what I would say is the first step is, let’s become an AI first professional services company before we become an AI professional services company.

David, Mohan, any final thoughts?

You know, we’ve said this before, right?

So you do know your business really well to understand where the leverage point, as David said, what the use cases are, why would you use it?

Is it around individual productivity?

And maybe that is sort of good enough.

Maybe it’s something about the products that you’re building.

It’s about some core capabilities that you have in the company that you want to enhance.

Just knowing what those leverage points are, and then being able to apply AI is key.

If you don’t know that, AI is not going to help you.

You need to know your business.

Yeah.

So well said.

Well, for everybody listening, I know that you’re listening because you probably have the desire to get there, and we’re really thankful that you listen to this podcast for some tips on being an AI company yourself.

David, Mohan, thank you.

Thanks.

Awesome.

Thanks.

Okay.

So maybe every company isn’t an AI company, but those companies that use AI to their advantage, especially at the operational level, will be well positioned to lap the competition.

That’s why I hope you can join Pete Buer and me for an upcoming webinar on May 22nd at noon Eastern.

We’ll be looking at how professional service companies can implement an AI-powered client management operating system to drive retention and growth.

You can register today at knownwell.com/masterclientsuccess.

We’ll save you a front row seat, and if you can’t make it, register anyway so you can get the on-demand recording.

Max Gabriel is the CEO of Augmented AI.

He sat down with Pete Buer recently to talk about why AI is eating sass and what that means for leaders like you.

Max, welcome.

It’s so good to have you.

Pete, thanks for having me.

Great to be here.

We are in the spirit of full transparency, bringing to the stage a conversation that you and I have been having offline over oatmeal breakfast in DC and by phone on a couple of different occasions.

I’ve been looking forward to this for a long time.

Likewise.

You do have a good memory.

Yeah.

It started off at the breakfast at DC, wasn’t it?

Yeah.

Well, let’s bring everyone else into the conversation that the two of us have started.

Could we begin, Max, with a little bit on your company and your role and where AI fits in?

Sure.

I’m a co-founder at Augmented AI.

We are an AI startup focused on events and media industry.

We know a lot about this space.

I spent the past decade working for our evented media company.

So we know there’s a lot of big problems to solve, and we think AI has the key to the solution.

If I were to name our conversation, we’ve kicked around a few.

This is sort of the AI is eating SAS discussion, and just because we’ve had the benefit of talking this through a little bit together before we’ve gotten onto the show, let’s start, Max, with what do we mean by that?

AI eating SAS?

Well, Pete, you remember the quote by Mark Andreessen about software is eating the world.

That was sort of a defining moment when he wrote that paper in, I think it was 2012.

And I feel software has eaten the world, and the world as a massive indigestion.

Every company is a tech company, right?

What’s up?

Every company is a tech company.

Every company is a tech company, and that’s where everybody followed.

I think it was 2017, the NVIDIA CEO made this assertion.

It was pretty ahead of his time when he said, AI will eat software.

That was in 2017.

And I’ve been paying attention to, you know, what’s been happening.

And I think we’re going to talk a lot more about AI rest of the conversation, but let me level set on SaaS a bit, right?

The SaaS was never about a technology innovation.

It was really a business model innovation.

It was really about how the software was sold and deployed rather than how it worked.

So there wasn’t much changed in terms of from on-prem to SaaS.

To put it in perspective, you know, today the SaaS market is about $300 billion.

There are about 150,000 SaaS products out there, depending on which stats you look at.

85% of enterprise software sold are SaaS products.

And we’ll go into some of these numbers a little later, but when you look at that, right, 150,000, about 25% just in productivity and collaboration.

That’s a lot of tools.

And the reason for that is the business model was so lucrative, it invited so many new entrants to come in and start to take slices of the software budget, right?

So I just want to spend time on establishing the problem because that’s what happened.

So companies started, it was easy to bring in a new software, shadow IT purchases, and things like that.

So more and more software, SaaS products start to get into companies.

And where we are left with today is, if you’re a mid-sized company, you’re dealing with 100 to 150 piece of software to run your business.

A mid-sized company actually end up spending twice as much as a larger company in terms of per employee software cost.

And if you’re a larger company, you’re looking at it roughly about 350 pieces of software.

So I think the statement where we are in, the current state we are in is, this is not sustainable, right?

So there is so many tools coming into the business.

So per user cost is increasing.

The data silos that these tools are introducing is going up.

And there’s massive effort to tie all these pieces together.

So we’re sort of getting into, even before AI, there’s just getting into sort of an unsustainable state.

You know what I mean?

Yeah.

We’ve seen so many examples too, of how what was intended to be a benefit has ended up being a burden.

I think about the salesperson who has to consult 12 different systems in the tech stack in order to get a view of a single customer.

So eight hours later, they’re ready to pick up the phone and make a call, that’s not how this was supposed to work.

That’s always the blessing and curse of a successful business model, isn’t it?

When it works, everybody starts to replicate it to a degree of inefficiency where it doesn’t work anymore, the client.

Okay.

So enter AI and it’s going to be in eating this problem for us.

Tell us a little bit about how that’s going to work.

So what’s been happening is, I think at least the past five years, two things, two factors started happening.

One is cheaper SaaS started eating more expensive SaaS.

If you’ve been watching that, right?

So people are saying, well, I don’t want to pay that much.

So I’m going to go for more cost effective and lower cost SaaS products.

That’s why there’s more proliferation of tools coming into the market.

And AI has been started to use as an add-on on top of existing software for recommendation, prediction, and things like that.

It was never at the core.

It was always as an add-on.

Those are the things that was happening over the past five years.

And I think that GenAI, with the advent of actually a machine can understand how we speak, a machine can understand our natural language.

That is certainly sort of a breakthrough moment for how automation can profoundly change going forward, right?

So I think we’re very early stages.

I’ll just emphasize that point.

I mean, it hasn’t started to eat yet, but it is going to start to eat as we go forward and the possibilities are endless.

Are you seeing any early examples?

I think not in terms of replacing existing software, but there are some credible solutions that are starting to come in place.

I would definitely call out professional services such as legal, tax accounting and things like that, where instead of people buying very large enterprise software, now they can actually subscribe to an agent which does the job.

So we’re seeing signals that this is where it’s headed.

So you and I and now our friends listening are clued in on the fact that this is a trend soon to break.

How about the rest of the world?

How widespread is the understanding that there’s a threat to the traditional SaaS model?

I think the pain is felt if you’re a large enterprise because all of a sudden the CFOs are waking up and saying, wait, SaaS was this innocent little line item at the bottom, but it’s just climbing up as one of the biggest spend next to people cost in many of the budget.

That’s one.

So the large enterprises are waking up and medium sized companies are trying out different models of to say should we build it ourselves?

Should we look at the utilities on how we can replace it?

So the efforts are starting to happen.

But I think one area to watch is probably, always follow the money where the investments are going.

Right.

I don’t know if you want to talk about that.

Yeah, please, let’s go there.

It’s always interesting to see what PE and VC and investors are placing bets with.

So you have a take on that?

I do, because in a way, if you look at where we are with SaaS, right, it’s kind of the VCs co-created this problem.

The business model was really successful.

And the ARR model and said, wow, great valuation and more money went into SaaS and here we are, right?

So which is kind of, we are in a very interesting space where now VCs are saying, actually, the AI space, particularly the agent space, there is more money that’s starting to flow in, just to put it in perspective.

Coincidentally, the AI investment have reached about $300 billion, overall AI investment, and AI agents are very small at the moment, but it’s just growing at an astronomical pace.

In 2025, it’s roughly about $8 billion, expected to grow to about $50 billion in the next five years.

And the overall AI investment, depending on which stats you look at, over a trillion dollars by 2030.

So there’s a lot of money flowing in, which is where you gotta be cautious that we don’t repeat the same mistake where we’re chasing the valuation.

I know you can’t possibly know the answer to this question, because I’m asking you to predict the future, but I’m gonna ask you to predict the future.

We’re talking about upheaval in a well-established market.

How disruptive is it and how fast does it come?

It is, well, it’s a very good question.

I’m only gonna speculate.

I have no idea how it’s gonna go.

It’s all there’s room for, I guess.

And you know this, Pete, where we always overestimate what happens in the short term and underestimate what happens in the long term.

And I think that’s what’s gonna play here.

It is just tantalizingly tempting to say, actually, this is so easy to do.

And then once you get into it, there’s a lot more to it.

So it’s gonna take time to truly embrace, to truly embrace it and leverage their capabilities.

And it’s just a matter of how the leaders take a long term view towards it, rather than chasing, you know, quick and rapid pilots, which is actually gonna result in a lot of disappointing results.

And you referenced investors’ viewpoints on the market.

How about leaders, you just mentioned, and are our experiments happening around agentic AI and maybe alongside SaaS solutions so that companies can start making decisions about what the which horse wins in the long run?

I think there’s certainly a lot of experimentation, you know, regardless of the driver.

Some of it is peer pressure, right?

What are you doing in the Mr.

CEO?

What are you doing about AI?

Some of it from boats, some of it is from peer pressure.

So there’s plenty of experimentation that’s going in.

You know, I always see this as a spectrum where they’re probably sort of leaders still in denial saying, it’s not going to happen to my industry.

And on the other end of the spectrum, there is this panic and FOMO.

We’re in a treadmill trying to do a lot, you know, being busy and doing a lot of things.

Where I think we want, you know, both groups to sort of come to the middle to see, okay, this is not a one-off blip.

You know, how do you take a methodical multi-year approach on how do we embrace it as an organization?

One of the common mistakes that I see, you know, and I don’t think the media news and insight is helping because what we saw with cloud, what we saw with mobile, this also looked at as a technical specialist thing as opposed to, you know, this is an organizational, you know, shift on how we should look at this.

You mentioned investments in AI on a number of different categories.

Let’s be specific here about what kind of AI or what category of AI solution it is that ends up eating SaaS over time.

Yeah, I think post-gen AI, which is what 22, 23 time frame, there’s certainly, there’s been a lot of investment chasing just the core infrastructure and foundation layer.

A lot of capital, right, to get started for sure.

And that’s good.

That’s in a good place right now.

And I don’t think you’re going to see significant pouring of capital into that.

What you’re going to see is the layer on top of it, which is agents, which I’ll explain, that is my definition of what it is.

Agents are going to attract a lot of investments and eventually vertical AI agents will take more investments in the forward years.

If I take a pause and explain what agent is, Pete, I’m sure…

Yeah, help us with agent versus vertical.

Okay.

Agents in a very simplistic way, there are systems which can perceive the current environment, perceive the requirements, which means it has knowledge to understand the problem and the context effectively.

It can come up with a plan of action on how to solve it.

And then use reasoning to come up with a set of choices it can make to solve the problem.

And actually act on it.

That’s the fourth stage.

It can actually act on it with minimal or no supervision from humans.

And the last one is the important bit.

It’s an afterthought.

Can it actually learn from it so that every execution, the agent gets smarter and smarter in terms of the context, how well it’s working and all of that.

And we already seeing it.

I don’t know if you’ve used Manners AI, which is, you know, came out recently, incredibly powerful AI agents.

So there’s a lot of horizontal agents which are helping you do tasks and goals, which would have taken you, you know, half a dozen prompts to get there.

These agents, you know, are building a way that it can understand and interpret your goal and actually help you get that job done, right?

So this area is going to see a lot of investments.

And so then take us to the vertical agent.

Vertical agent, you know, will deep dive into it because I think that’s where the real innovation is going to happen.

But let me give you, just differentiate it, right?

The agents that are helping you achieve a general goal, as in, you know, just review this paper and give me a rating.

Or, you know, make recommendation to go here and, you know, create a document, right?

Things like that, plenty of thousands and thousands of agents that are being produced.

Where it’s headed now is actually vertical agents is very industry-specific with deep domain knowledge, where it can solve a specific problem, right?

It’s not unique, and as you know, there are vertical SaaS that’s been there, vertical software that’s been there, but it’s how it works.

That’s the distinction I would make, right?

In how software work did not change with SaaS, with vertical agents, that would fundamentally change.

I’m going to use this occasion to hit pause in our conversation, so that we can pick it back up again in a second chapter.

We have identified the protagonist or the antagonist, as it were, in the story, depending on where you sit, I guess, the vertical agent, and I’d like to come back and talk about that in greater depth.

So for the moment, I’ll say, Max, thank you so much for being here.

Thanks, Pete.

Pete Buer joins us as always to break down the business impact of some of the latest and greatest AI news.

Hey Pete, how are you?

I’m good Mohan, what did you do with Courtney?

She, I think, yeah, she is somewhere, hopefully, enjoying life.

Listeners will miss her, but they’re in for a surprise to get a taste of Mohan.

The Wall Street Journal just ran a piece titled, AI’s threat to Google just got real.

Apple’s Eddie Kew said Google searches on Safari fell over the last two months.

This was the first time in 20 years this has happened.

Pete, what’s the takeaway here and why is this a big deal?

So I think we all recognize Google’s kind of been in the catbird seat on search for the past couple of decades, right?

This is the first real decline they’ve ever seen and reported through a very important partner channel.

So Google searches on Safari dropped over the last couple of months, brought on by Root Cause Analysis, ChatGPT and Perplexity, and some of the other AI-powered search alternatives, tools that do things other than search, but that are terrific at search as well.

The market saw it, share prices for Google’s parent company, Alphabet dropped 7% with the announcement, something like 250 billion in market cap estimated from that two-month decline, and Apple dropped a bit too, collateral damage, I guess, from the revelation.

I think the conclusion is that investors are seeing some reality in the prediction that we’ve stood behind for some time, that AI tools will change the way people get and use their information.

As a business leader, listening, what do I do about that?

I think you have to follow this transition closely.

I think it should be a metric that you’re keeping an eye on with your strategy process and signposting and so forth.

If for no other reason than to understand where to place and how to place your ads in the search tools now and going forward.

I think two years from now, when we look back, the terrain will be very different than it is today.

I think also recognize you need to sharpen and be more competitive on those platforms.

You’ve got one platform that seems to be on the decline, where you’ll be fighting for less traffic, I suppose, and then another set of platforms where it’s expanding.

And in both cases, there’s an imperative to be as compelling as you can possibly be.

I think that’s the external advice.

Internally, recognize for your teams that there’s a wider set of enterprise solutions at your disposal for search and information manipulation.

And get clear on the capabilities and pricing for each of them so that you can be sure you’re giving your teams the best that the market has to offer according to what their need is.

So it sounds like a profound change there for marketing and search engine optimization and those things.

So Pete, thank you for breaking this down for us.

Thank you, Mohan.

Thanks as always for listening and watching.

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At the end of every episode, we like to ask one of our AI friends to weigh in on the topic at hand.

So, hey Claude, welcome back.

Is every company an AI company?

Nah, plenty of businesses are still doing their thing without going all in on AI tech.

Some are dipping their toes in the AI waters, but many are still running on good, old-fashioned human brain power for most of what they do.

And now, you’re in the know.

Thanks as always for listening.

We’ll see you next week with more AI applications, discussions and experts.