If AI can do the work… why are we still valuing software like it only sells tools?And if the real opportunity isn’t software (but labor) are we about to underestimate the biggest companies of this cycle?In this episode of Verticals, Luke and Nic sit down with David Haber, General Partner at Andreessen Horowitz, to break down why vertical AI is fundamentally changing how businesses are built, and why this shift could be bigger than SaaS itself.David explains why AI-native companies aren’t just selling software — they’re replacing labor. And how that single shift unlocks markets that were previously too small to matter.They unpack the new playbook for vertical AI:-Why TAM is no longer software spend, it’s labor-How messy inputs like email, fax, and voice are becoming billion-dollar wedges-Why AI-native companies are turning services businesses into high-margin softwareThey also explore what actually creates defensibility in this new world:-Why owning workflows and outcomes matters more than ever-How proprietary data compounds into a real moat-Why market structure is more important than market sizeAnd they go deep on the biggest strategic question:If AI owns the workflow, the data, and the outcome… Do you even need to charge for the system of record?If you are building, investing, or trying to understand where AI is actually creating value, this is one of the clearest breakdowns of what comes next.👉 FOLLOW DAVID HABERX ➡️ https://x.com/dhaberLINKEDIN ➡️ https://www.linkedin.com/in/haber/👉 FOLLOW LUKE SOPHINOSX ➡️ https://x.com/lukesophinosLINKEDIN ➡️ https://www.linkedin.com/in/lukesophinos/NEWSLETTER ➡️ https://www.newsletter.lukesophinos.com/👉 FOLLOW NIC POULOSX ➡️ https://x.com/picnoulosLINKEDIN ➡️ https://www.linkedin.com/in/npoulos/NEWSLETTER ➡️ https://insights.euclid.vc/🎬 TIMESTAMPS:00:00 Intro01:28 Why the SaaS-AI shift is bigger than it looks07:09 Why “small markets” suddenly become massive10:06 The 3 ways to attack legacy software15:10 Why incumbents still have an advantage18:02 The real risk (and opportunity) in the AI era27:31 The messy inbox wedge (email, fax, voice)34:31 Why unstructured data is the biggest opportunity40:43 Voice, context, and the future of enterprise data44:15 The biggest mistakes vertical AI founders make45:28 The next wave: financial services, healthcare, industrial AI📃 Topics:1. Vertical AI vs SaaS2. AI replacing labor vs software tools3. System of record vs AI workflows4. AI services vs software margins5. Defensibility in AI startups6. TAM expansion through automation