AI Expands 'Shadow IT' Instead of Consolidating SaaS
Contrary to expectations that AI would consolidate software tools, it is accelerating SaaS sprawl and expanding 'shadow IT', according to a new report from Torii. The 2026 benchmark report finds that 61% of applications inside companies are unmanaged, increasing governance and security risks. This trend is compounded by analysis from Coatue's Lucas Swisher, who noted that AI is eroding the moats of established SaaS companies, making their long-term value uncertain.
- The average company now has over 830 applications, with large enterprises managing an average of 2,191. This complexity is compounded by the fact that only 15.5% of applications are formally sanctioned by IT departments. - AI-native tools are a primary driver of this new wave of shadow IT, with employees independently adopting them faster than governance models can adapt. This rapid, uncontrolled adoption significantly increases security risks, as organizations that don't centrally manage their SaaS lifecycles are predicted to be five times more susceptible to cyber incidents. - The valuation gap between AI and traditional SaaS companies is widening significantly; in public markets, the median AI market cap-to-revenue multiple is over 10x, while it is below 5x for SaaS companies. In private markets, some analyses show AI SaaS startups commanding median revenue multiples as high as 25.8x, compared to a 2.5x-7.0x range for traditional SaaS. - This valuation pressure is causing a strategic shift in SaaS pricing models, moving away from seat-based licenses towards hybrid or usage-based models to better align with value delivered by AI features. - In Turkey, the AI startup ecosystem is expanding rapidly, with approximately 1,200 active startups, 70% of which were founded after 2020. In February 2026, the Turkish government announced plans for a $10 billion venture fund to support AI and data processing startups through 2030. - Despite a 45% decrease in overall VC funding for Turkish startups in 2025 to $589 million, AI-focused startups accounted for one-quarter of all investment deals. However, the median investment size for Turkey-based AI startups remains modest at around $100,000. - The majority of Turkish AI startups, about 75%, are focused on B2B enterprise solutions. This aligns with a broader trend where investors are prioritizing AI companies that can demonstrate clear revenue growth, cost reduction, or customer expansion within an enterprise setting.
