Y Combinator president Garry Tan said that Zoho would be the first to be competed away by people building their own custom software using multiple AI-driven coding and app-creation platforms. Tan wrote, "Why pay $30/seat/month for overbundled SaaS when soon even non-tech ops people can vibe code a custom solution in a weekend?"

Y Combinator president Garry Tan's controversial remarks about Zoho has sparked outrage. He claims that a new wave of AI-powered development tools will make Zoho obsolete in the coming years. This statement got many reactions, and has prompted Zoho co-founder Sridhar Vembu to react. He dismissed this prediction stating that the customer base of the SaaS giant is growing at over 50 percent.

Tan took to X to post about his throughts on the Indian company. He said that Zoho would be the first to be competed away by people building their own custom software using multiple AI-driven coding and app-creation platforms. Tan wrote, "Why pay $30/ seat/ month for overbundled SaaS when soon even non-tech ops people can vibe code a custom solution in a weekend?"

Tan's remarks centred on the emerging concept of 'vibe coding', where non-technical teams can create custom apps using AI tools in minimal time. He specifically mentioned platforms like Replit, Emergent Labs and Taskade as examples that now allow almost anyone to build custom apps quickly. His argument suggested that the availability of these tools would render traditional software-as-a-service offerings unnecessary, particularly for businesses that currently pay subscription fees for bundled enterprise software.

Vembu responded directly to Tan's claims on X, challenging both the premise and timing of the assertion. "If our business were the first to be competed away by vibe-coded apps, why are we seeing such rapid customer growth (exceeding 50 percent) right now?" he wrote.

The Zoho co-founder pointed out that despite the emergence of AI-powered development tools, fundamental software categories remain untouched by such solutions. "Why don't we see vibe-coded email or spreadsheet, accounting app, or messaging apps yet?" he questioned.

Taking the exchange further, Vembu remarked, "Of course, for people like Garry Tan, tech debt is to be pawned off on unsuspecting acquirers", suggesting that Y Combinator companies often rely on acquisition as an exit strategy. He concluded his response with a direct challenge, "Let me make a bet with Garry Tan: we will outshine and outlast his vibe coding companies!"

The exchange follows Vembu's earlier comments on vibe coding, where he wrote on X that "All code is magic until it is lowered by the compiler to another form of code, and that code is magic until magic all the way down." His position suggests that vibe coding oversimplifies the complexity inherent in software development.

The debate has drawn attention to wider questions about whether AI-assisted development tools can truly replace traditional enterprise software. Whilst proponents like Google chief executive Sundar Pichai have described vibe coding as making programming "more enjoyable" and "more approachable", critics argue that such tools may not be suitable for complex, mission-critical applications that require robust architecture and long-term maintenance.

Elon Musk made similar remarks about Microsoft

Similar remarks were made by X owner Elon Musk a few months ago about Microsoft. Elon Musk told Microsoft CEO Satya Nadella that "OpenAI is going to eat Microsoft alive." However, Nadella responded with a composed and forward-looking remark, "People have been trying for 50 years and that’s the fun of it! Each day you learn something new, and innovate, partner, and compete. Excited for Grok 4 on Azure and looking forward to Grok 5!"