The SaaS Massacre: Public Market Collapse |Microsoft Lost $360B & NVIDIA’s $100B Dispute with OpenAI

Jason Lemkin and Rory O’Driscoll on 20VC dissect the 2026 SaaS massacre, SpaceX-xAI merger, Waymo’s $110B raise, and the agent social network Moltbook.

• SpaceX acquired xAI at a combined $1.25T valuation; Lemkin frames this as the end of ‘stay private forever’ — even the most-loved private cos need public capital.
• Every quarter since Q1 2022, growth rates have declined for the top 25 public software stocks without exception; only Palantir and a handful have reaccelerated.
• Lemkin’s new binary: private companies are either growing at insane rates or unfundable; AI vs. non-AI framing is a dated 2025 debate.
• Microsoft lost ~$360B in market cap as AI narrative shifted; both Microsoft and OpenAI say compute and revenue have a 1-to-1 correlation, justifying consuming every available dollar.
• Nvidia’s $100B OpenAI investment hit public friction — Nvidia issued a term sheet, OpenAI hasn’t delivered, and Jensen Huang and Sam Altman traded public barbs over chip speed.
• Waymo raised $16B at $110B valuation on $350M run rate; O’Driscoll argues Waymo works but has structural cost problems (LiDAR, teleop, fleet utilization), while Tesla’s FSD isn’t there yet but has lower cost structure if it arrives.
• Moltbook connected 1.5M agents in days, was breached within 24 hours (passwords/emails leaked), and agents silently auto-update instructions every 2-4 hours — framed as security nightmare, not sentience.

2026-02-05 · Watch on YouTube