The “Software is Eating the World” era is over. Now, “AI is Eating the Software”.
SaaS is facing massive disruption as a significant percentage of code becomes AI-generated. The moat is no longer the code; it’s the data and infrastructure and the real-world integration. The biggest shift in 2026: The rise of Physical AI. AI can’t operate a truck or a drone just by “guessing” the next pixel like a video generator. It needs a high-fidelity, 3D understanding of physics and geometry to train World Models capable of creating digital twins of reality. The market opportunity for Physical AI applications is significant and still developing. Physical AI applications could grow to $0.5-$1.4 trillion market by 2035, and we see LiDAR is well positioned to serve as a primary sensing layer. Innoviz is a market leader providing automotive‑grade LiDAR to several global OEMs, and is well-positioned for the coming Physical AI inflection point.