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Bret Taylor on AI and the Future of Software | Ep. 42

| 18 products mentioned
Uncapped with Jack Altman Uncapped with Jack Altman host
Bret Taylor guest
Watch on YouTube ai agents enterprise software saas disruption outcome-based pricing platform shifts regulated industries competitive advantage

Bret Taylor, CEO of Sierra and board member of OpenAI, discusses how AI agents are disrupting enterprise software and fundamentally reshaping how companies should be built. Taylor argues that while the current market uncertainty around SaaS stocks reflects real questions about systems of record, the true value will shift from databases to outcome-based pricing models and agents that perform measurable business outcomes rather than simply automating workflows.

Key takeaways
  • • Systems of record (ERP, CRM) have historically derived value from high switching costs and ecosystem lock-in, but AI agents threaten this model by reducing the importance of the database and shifting value to autonomous agents that perform actual work.
  • • Outcome-based pricing is superior to token-based pricing because customers care about measurable results (leads generated, support tickets resolved) rather than computational inputs, and this model will become the secular business model for AI agents.
  • • Incumbent software companies struggle with strategy tax—their existing product architecture, business models, and sales incentives often prevent them from competing effectively with pure-play AI startups, similar to how Siebel Systems lost to Salesforce during the web browser shift.
  • • Applied AI should be definable without mentioning models or tokens; companies should describe their value proposition in terms of business outcomes (e.g., "solve 80% of support calls with 4.8/5 satisfaction") rather than technical implementation details.
  • • Enterprise experience matters significantly in regulated industries; the intersection of deep AI knowledge and business domain expertise allows companies like Sierra to serve Fortune 100 companies where most AI projects fail, making the combination of technical and organizational maturity a durable competitive advantage.
  • • AI will likely create more efficient companies rather than dramatically smaller ones because competitive markets force efficiency gains to be reinvested in better products, lower prices, or customer acquisition—similar to how ATMs didn't eliminate bank branches but changed what bankers do.

Recommendations (2)

Codex
Codex uses

"Codex is like mindblowing right now... the first time you oneshot something and it turns out like really good and not like slop but like really good. It's an emotional experience"

Bret Taylor · ▶ 24:01

Harvey
Harvey recommends

"I believe in companies like Harvey. I really admire what they do and you know they have an agent that will do an antitrust review."

Bret Taylor · ▶ 38:16

Mentioned (16)

ChatGPT
ChatGPT "We could pull up ChatGPT and ask." ▶ 9:15
Salesforce
Salesforce "you've been the co-CEO at Salesforce" ▶ 0:55
OpenAI
OpenAI "You're on the board of OpenAI... our mission is to ensure artificial general intelligence benefit..." ▶ 1:01
Microsoft
Microsoft "you saw what Microsoft did in the cloud transformation and they went from being dependent on Wind..." ▶ 5:35
Oracle
Oracle "the core databases that Oracle you know sort of famously powered in the early days of software" ▶ 1:43
SAP
SAP "no one's going to blame you for choosing SAP because everyone chose SAP" ▶ 3:43
Workday
Workday "ERP systems which is workday SAP Oracle" ▶ 5:21
Adobe
Adobe "Adobe Shanton who did this at Adobe. Very few companies could make that transition." ▶ 10:35
Azure
Azure "they went from being dependent on Windows revenue to going to active directory and Azure" ▶ 5:41
AdWords
AdWords "I started my career at Google I think I arrived like the day AdWords came out" ▶ 52:39
Rocket Mortgage
Rocket Mortgage "Rocket Mortgage, which is like the number one consumer mortgage originator in the country" ▶ 34:33
Redfin
Redfin "they own Redfin, which is a home search site... you can go to redfin.com and use an AI agent to s..." ▶ 34:30
Microsoft Excel
Microsoft Excel "Imagining being an accountant before Microsoft Excel and after Microsoft Excel... So much of the ..." ▶ 51:26
Benchmark
Benchmark "Peter Fenton from Benchmark... our first round of financing, I didn't talk to anyone else" ▶ 55:31
Sequoia
Sequoia "Ravi Gupta who just left Sequoia though he's still a venture partner there" ▶ 55:35
Green Oaks
Green Oaks "Neil Meta from Green Oaks... just a fantastic group of people" ▶ 55:39

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