Public software multiples sit at historic lows, yet in each category one business trades at a meaningful premium: CrowdStrike at 3.9x its Security median, Cloudflare at 3.4x Infrastructure, Shopify at 8.1x Commerce. Each has bulldozed an AI focused path.
Harvey, Legora & Sierra each announced crossing $100m in ARR within nine months of each other. The market priced them at 50x, 56x & 100x.
Per-engineer productivity from AI coding runs from -19% to 8x. The distribution has three tiers, & the gap between them is the operating layer, not the model.
The CIO's choices are clear in 2026 : fund the AI stack, cut everything else. The public markets are pricing it.
Anthropic spends 2.3x payroll on compute. Top software firms spend 0.4x. Three scenarios for where the rest of the market lands by 2029.
Reselling inference is a zero-margin commodity. The margin question comes down to cost-plus versus value-based pricing : one anchors to the inference line, the other decouples from it.
Databricks runs at $6.9b ARR growing 80%, widening the gap over Snowflake to $1.6b. Its AI products sit on the token path, where companies grow explosively even at scale.
The fastest growing companies in AI & software all share one property. They are either selling AI directly, or they are reselling inference. At worst, the first derivative of inference.
State-of-the-art AI email costs $22-130/month, but smaller models & local inference can cut costs by 100x. The next 12-24 months will be defined by matching models to workloads.
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