Snowflake's CEO says software giants risk becoming a 'dumb data pipe' to AI models

Sridhar Ramaswamy shares the interview question he knows candidates cannot prepare for. Justin Sullivan/Getty Images Snowflake's CEO warned that software companies may become mere data sources to AI labs. AI firms like OpenAI are aiming to consolidate enterprise data in one place, he said. He said that the solution is to let customers decide how they want to access their data. The biggest software companies might be reduced to mere data sources, says Snowflake's CEO. "The big model makers want to create a world in which all of the data for all of the enterprises is easily available to them," Sridhar Ramaswamy said on an episode of Alex Kantrowitz's "Big Technology Podcast" published last week. "Everything else, the world, is just a dumb data pipe that feeds into that big brain." Prior to becoming Snowflake's CEO in 2024, Ramaswamy was a partner at Greylock Ventures and cofounded AI search startup Neeva, which was acquired by Snowflake. Ramaswamy added that Snowflake needs to operate with a "fear" that people would stop using AI agents developed by software companies and instead want an all-inclusive agent that has data from Snowflake, for example, and everywhere else He said his solution was to let customers take the lead and decide how they want to access their data — directly through their own agents, or through a product like ChatGPT. In the last few months, AI labs have evolved from being sources of AI infrastructure to becoming software providers themselves. OpenAI has entered the sales, support, and document analysis market, threatening incumbents such as Salesforce and Oracle. On a podcast released last week, Andreessen Horowitz general partner Anish Acharya said software firms were being unnecessarily punished by Wall Street over fears that AI could take over their industry. The VC said that legacy software could not be replaced so easily, because it would not be worth it to use AI for every business function. He said that software accounts for 8% to 12% of a company's expenses, so vibe coding to build the company's resource planning or payroll tools would only save about 10%. Instead, companies should focus on big-ticket items, like developing their core businesses or optimizing other costs. Ramaswamy and Acharya's comments follow a brutal start of the month for software stocks, which dragged down tech and broader markets. The sell-off started when already-wary investors panicked about Anthropic's new AI tool, which can perform a range of clerical tasks for people working in the legal industry. Read the original article on Business Insider

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