June 16, 2026
Software used to defend itself with complexity. The product was hard to build, hard to maintain and hard to replace. That difficulty became a moat. Artificial intelligence is now attacking the moat directly.
Lovable, a Stockholm-based company founded in 2023, lets users create applications through simple prompts, a process often called vibe-coding. Its co-founder and chief executive, Anton Osika, argues that many existing tools can now be recreated in a few prompts. That is not a minor productivity improvement. It is a direct challenge to the business model of selling narrowly defined software subscriptions.
The old software economy rewarded ownership of the tool. The emerging one rewards speed, distribution and the ability to keep improving faster than customers can build around you.
The SaaS Moat Is Getting Thinner
The most uncomfortable idea for software incumbents is that usefulness may no longer be enough. If a customer can describe an internal tool and generate a working version quickly, then the bar for paying a recurring subscription rises. A product must be not only functional, but meaningfully better than what a user can assemble on demand.
That helps explain why investors have grown uneasy about established software companies. Since the start of the year, trillions of dollars have been erased from global software market capitalizations in a sell-off some analysts have called the “Saaspocalypse.” The fear is simple: if software becomes easier to create, the pricing power of software vendors becomes harder to defend.
Lovable’s own growth shows why the fear is not theoretical. More than 50 million projects have been created on the platform, with users on every continent. The company says 80 percent of its users are non-technical, and roughly 35 percent have monetized their projects. The tools being built range from apps and websites to inventory systems, HR platforms and customer relationship management systems.
That matters because the buyer is becoming the builder. When non-technical users can create commercially useful tools, the software market expands, but it also becomes more brutal. Every product category faces the question: why should this exist as a standalone vendor if a team can generate a good-enough version itself?
Speed Becomes the Moral Test
The analogy to analogue film is harsh but fitting. Some companies do not fail because they are incompetent. They fail because the world changes the definition of competence. In one era, durability and incremental improvement are virtues. In another, they become excuses for moving too slowly.
Osika’s warning is that the speed of change is accelerating. That creates a new ethical pressure on management teams. Leaders are not only responsible for protecting what already works. They are responsible for recognizing when protection turns into denial.
In software, playing safe can become reckless. A company that refuses to adapt may preserve its process while losing its purpose. Customers do not owe loyalty to old workflows. They care about results, cost and speed. If AI-powered platforms deliver those faster, incumbents must respond with more than branding and bundled features.
The Platform Wants the Whole Company
Lovable is not trying to remain only a tool for building apps. The company is positioning itself as a broader workspace for entrepreneurs and businesses, including what comes after product creation: marketing, HR and wider operations. Osika has described the Lovable workspace as a potential shared intelligence layer for running an entire business.
That is the larger strategic ambition. The first wave is building software with prompts. The second wave is running the business around that software through the same environment. If that works, the platform does not merely compete with coding tools. It competes with the operating system of the modern company.
The financial ambition reflects that scale. Lovable was valued at $6.6 billion in its most recent funding round in December and has reportedly been in talks for a new round that could value it at $12 billion. Its annual recurring revenue surpassed $500 million this month, up from $400 million in March. The stated goal is to build a $100 billion company while remaining based in Sweden.
The Security Question Cannot Be Waved Away
There is, however, a serious weakness in the vision. Software built quickly can also fail quickly, and security is not a cosmetic issue. Lovable has already had to apologize after private data connected to public projects, including chat history and source code, could be accessed by any user. The company says the issue has since been fixed.
The concern is broader than one platform. Research from Veracode found that about 45 percent of AI-generated code contained security vulnerabilities. If AI makes software creation more democratic, it may also make weak software more common. That is a real trade-off.
Osika has said security is one of Lovable’s biggest priorities and that the company is stepping up its efforts. It has to. Trust is the one feature that cannot be vibe-coded after the fact.
What This Means for Finance Careers
For students and young professionals interested in investment banking, this is not just a software story. It is a valuation story, a disruption story and a diligence story.
Bankers analyzing software companies will need to think harder about defensibility. Revenue growth and retention still matter, but so does the risk that a product category can be rebuilt by customers or AI-native competitors. A company with strong historical margins may still face a shrinking moat if its core function can be replicated through prompts.
The better questions are no longer only “How fast is it growing?” or “What multiple should it trade at?” They are also: what does this company do that a customer cannot cheaply build, what proprietary advantage improves with scale, and how exposed is the product to AI-driven substitution?
The prompt era does not mean every software company dies. It means every software company has to justify its existence again. That is healthy for customers, painful for incumbents and important for anyone trying to understand where enterprise value is really being created.