HSBC has concluded that enterprise software will continue to be the dominant route through which the largest corporations integrate artificial intelligence into their operations, even as large-scale foundation models advance rapidly.
Analyst Stephen Bersey of HSBC wrote that "software will be the primary mechanism for the diffusion of AI across the world’s largest enterprises," and identified 2026 as "the kick-off for monetization within software." The note argues that foundational AI models are "inherently flawed" for wholesale replacement of major enterprise platforms.
According to HSBC, foundation models may be serviceable for focused tasks - for example, generating images or powering small, narrowly scoped applications - but they are "not realistic for the majority of high-fidelity enterprise class platforms." The bank emphasizes that these enterprise-grade systems demand qualities and capabilities that foundation models do not naturally provide.
One specific limitation HSBC highlights is what it calls "vibe-coding," a model of development that shifts design responsibility onto the developer. The bank asserts that the leading creators of large AI models have "little to no experience creating 'enterprise class' software," meaning those firms would effectively be starting from ground zero when confronting the complexity of enterprise environments.
HSBC also notes that enterprise software has matured toward being "almost error-free with high throughput and reliability." That accumulated intellectual property - the code, architectures, and operational practices that underpin dependable enterprise systems - is not something that can be trained or replicated simply by scraping data from the public internet, the bank says.
Even in a scenario where a new entrant managed to produce comparable code, HSBC underscores the practical difficulty of displacing incumbent vendors. Those vendors operate critical systems that underpin the core operations of global companies that are accountable to shareholders, creating strong inertia against wholesale replacement.
Given these dynamics, HSBC argues established enterprise software vendors are positioned to commercialize AI first and most effectively. The bank points out that incumbents are already integrating what it calls "distilled intelligent agents" into existing platforms in controlled ways that address the shortcomings of foundation models. HSBC concludes these enterprise vendors are therefore likely to be the main beneficiaries as monetization of AI within software accelerates.
Promotional note appearing in the original release
Separately within the original material, a product promotion states that AI-driven stock selection tools claim notable returns: year-to-date, two out of three global portfolios are said to be outperforming their benchmarks with 88% in the green, and a named flagship strategy reportedly doubled its benchmark over an 18-month span, citing specific winners. This promotional content was present in the source material but is not an analytical claim about the HSBC research itself.