AI Is Replacing Saas Faster Than Expected, Curative CEO Says After Canceling $600,000 Salesforce...

Artificial intelligence is beginning to replace traditional enterprise software at some companies, adding fresh momentum to the debate over whether generative AI could fundamentally reshape the software-as-a-service (SaaS) industry.

Fred Turner, founder and chief executive of U.S. health insurer Curative, said his company has dramatically reduced its reliance on third-party software after building internal AI-powered alternatives, including replacing a Salesforce customer relationship management (CRM) system that previously cost the company $600,000 annually.

Speaking on the "20VC with Harry Stebbings" podcast, Turner said he believes the so-called "SaaSpocalypse" is real, referring to concerns that AI coding tools will enable companies to build customized software rather than subscribe to expensive SaaS platforms.

Asked whether he subscribes to the theory that SaaS is dying, Turner replied simply: "Yes."

Explaining his position, he pointed to Curative's own experience.

"I see the number of contracts that we're canceling," Turner said. "We just recently canceled our Salesforce contract because we have an internal CRM that was vibecoded."

According to Turner, the company developed the replacement CRM in just two months, illustrating how AI-assisted software development is shortening development cycles that once took many months or even years. Curative now plans to reduce its overall SaaS spending by about 80% this year, redirecting much of that expenditure toward artificial intelligence infrastructure and AI models instead.

The development has added to the growing divide within the technology industry over AI's long-term impact on enterprise software vendors. Earlier this year, fears that capable AI coding agents would allow businesses to build bespoke internal applications instead of licensing commercial software triggered a broad selloff in SaaS stocks.

Companies including Salesforce, Asana, DocuSign, ServiceNow, Adobe and Workday saw their shares fall sharply, in some cases by between 20% and 50%, as investors questioned whether AI would erode the subscription-based software business model that has dominated enterprise technology for more than a decade.

The concern centers on advances in AI-assisted programming, often called "vibe coding," where developers use large language models to generate, modify, and maintain software with natural language prompts. Supporters believe that the technology dramatically lowers development costs and makes custom-built applications economically viable for companies that previously depended on packaged software.

Salesforce Chief Executive Marc Benioff has strongly rejected predictions of a SaaS collapse.

Speaking during the company's February earnings call, Benioff said demand for Salesforce products remains robust, arguing that AI agents actually increase the value of enterprise software platforms rather than replace them.

"If there is a 'SaaSpocalypse,' it may be eaten by the 'SaaS-quatch' because there are a lot of companies using a lot of SaaS because it just got better with agents," Benioff said.

Salesforce has also highlighted that more than 150,000 organizations continue to use its platforms and argues that enterprise applications provide capabilities that internally built systems often struggle to replicate, particularly around security, compliance and governance.

A Salesforce spokesperson told Business Insider that the company's platform is designed with trust and governance at its core and is built to handle complex healthcare regulations such as the U.S. Health Insurance Portability and Accountability Act (HIPAA).

Turner acknowledged that replacing commercial software with internally developed AI systems is not without challenges.

"Maintenance is definitely one of the most challenging pieces," he said, noting that keeping custom software updated remains an ongoing operational burden.

At the same time, Curative's investment in AI has expanded rapidly.

Turner said the company's spending on Anthropic's AI models has increased dramatically over the past six to seven months as it finds new applications for generative AI across its business.

"Our Anthropic cost over the last six or seven months has 6x'd every month, from a base of a couple of tens of thousands of dollars, now up to millions of dollars a month," Turner said.

"Eventually, we're going to have to stop that spending increase because it'll get unreasonable, but we just keep finding new things to do with it."

Even with rapidly rising AI costs, Turner argued the economics remain compelling because the productivity gains significantly outweigh the additional expenditure. He cited Gwen, Curative's internally developed AI agent used to negotiate contracts with physicians and healthcare providers.

Before deploying the AI system, completing each contract reportedly cost Curative between $1,500 and $2,000. Gwen has reduced that average cost to about $70 per contract, according to Turner.

The lower costs have also enabled Curative to expand its operations rather than simply reduce expenses.

"What we've done is said, 'Well, now that we have the agent, we can do 10 times as many contracts this year as we could do last year,'" Turner said.

"So, we're going to do 10 times, and then we're going to try and do 20 times, and we would just do a lot more volume than you could possibly have done with a human team."

The corporate technology spending is shifting toward a new pattern. Rather than eliminating software budgets altogether, many organizations are reallocating spending from traditional SaaS subscriptions toward AI infrastructure, foundation models and custom AI applications. While some executives view generative AI as an opportunity to replace standardized enterprise software with tailored internal systems, established software vendors believe that enterprise-grade security, compliance, scalability and integration capabilities remain difficult to replicate.

This view places AI as an enhancement to SaaS rather than a replacement.