AI Is Making SaaS Optional

SaaS isn't dead. But what happens when the people who know a business best can build the software they need themselves?

In Episode 29 of System Prompt, Peter and Val return to SaaS vs. AI for an unscripted sequel: Revenge of the SWE. They debate whether agents become interfaces to existing SaaS products or replace some of those products entirely. From an accountant building tools with Claude Code and SQLite to small businesses recreating only the features they use, the question isn't simply whether AI can write code. It's who understands the process, validates the outcome, and maintains the result.

The conversation explores software engineering, domain expertise, deterministic workflows, harnesses, MCP, AI operations, local inference, and the challenges of organizational data and persistent memory. They also discuss frontier subscriptions versus local models, AI devices, and why AI-gen