Will AI eat software? Not so fast

The AI vs software debate

by · TechRadar

Opinion By Jason Kurtz published 7 May 2026

(Image credit: Getty Images)

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With AI enabling businesses to build their own software at the ‘speed of light’, concerns are rising over the future of traditional software. The concern is that companies will replace third-party vendors with custom-built applications. But the evidence doesn’t support this.

Jason Kurtz

CEO of Basware.

What leaders are getting wrong with AI vs software

According to research, 44% of CFOs feel pressure to adopt AI. And 61% say they are funding “experiments” by CIOs. But these experiments are largely failing, which is why AI will not eat software.

The digital transformation officer at a large European company, who has spent around a million euros on internal AI-related projects in finance over the past year, recently told me he couldn't point to a single penny that the company has saved, earned, or helped the business in any way.

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And he’s decided to pull the plug and bring in vendors who know how to use AI in their processes and workflows.

When to build vs buy

AI can’t simply be set free. To be trusted and effective, it requires clean data, strong governance and the right infrastructure. And it has to operate on accurate, integrated data across systems and transactions and work with human oversight.

So, the key questions to ask when considering how and where to use AI are: will it improve the company’s value proposition, and is there a case for owning a unique data set?

If so, building custom applications can drive differentiation and long-term value. Proprietary risk models are a good example of when in-house AI solutions can deliver ROI, with outputs linked directly to leadership scrutiny, and models improve over time as internal data compounds.

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