We need a plan to ensure that the good outweighs the bad.
Work
What you need to know
During my entire life Iโve only had two jobs. In the first one, I played a role in developing software to empower people through my work at Microsoft.
In my second one, which I started full time in 2008, I am giving back the wealth I made at Microsoft with the goal of making the world a healthier, better educated, and more equitable place. This is the job I will have for the rest of my life.
Both of these experiences inform my perspective on artificial intelligence. When I first learned about computers at age 13 I was fascinated by the idea of making them more intelligent and able to perform things that, at the time, only humans could do. Although the term โAIโ was used from around the time I was born, the technology has only made significant progress in the last decade. It is now incredibly capable and it is continuing to improve at a mind-blowing rate. AI for the first time can replace and even exceed human cognition.
In terms of equity, AI will either be the greatest equalizer ever invented, or the worst source of injustice. The challenge is monumental. Even under the best circumstances, the transition to this new AI era will be one of the most turbulent times in human history. How will we use this technology to make the world a fairer place and keep it from widening the divide between rich and poor? How will we protect the people who are most vulnerable to the harms caused by artificial intelligence, including those who lose their livelihoods and the sense that they are in control of their future?
I believe that answering these questions and acting on the answers should be the worldโs top priority. If the world takes the right steps AI will be a force for good and leave everyone better off.
Part of the reason for this is that many commentators underestimate the extent of the impact AI will have. I think there are a few reasons why.
One is the fact that AI models still make mistakes. It is hard to envision any of them replacing human cognition when, not long ago, they couldnโt solve a simple Sudoku puzzle or figure out how many Rโs are in the word strawberry.
But the reliability problem is being fixed quickly, as researchers create models that can check their own work and improve themselves. Soon they will be substantially better than humans at many tasks.
Another reason people underestimate AI is that analogies to the effects of past innovations are misleading. We have no experience with a technology that can be adopted quickly or that can think and move like a human. When the PC came along, it took twenty years to significantly change how we worked because the software had to be developed, the price had to come down, and people had to learn how to use the tools and incorporate them into their business processes. AI, on the other hand, runs on the devices we already have, and it uses natural language. We donโt have to adapt to it because it can adapt to us. It can watch the same training video that is used to train human workers and learn from existing data.
Andrew Stanton CEO Proptech-PR
AI has Changed the value of proptech and legacy technology is paying the price
Thought leadership by Andrew Stanton
For more than two decades, the value of proptech was built around a fairly simple proposition: take an inefficient property process, turn it into software, sell it to an enterprise customer and charge a recurring subscription. That model created some very valuable companies.
If we focus on for example the tiny world of residential estate agency/brokerage here in the UK, we see that property portals, CRM platforms, property management systems, valuation platforms, transaction software and data businesses built substantial recurring revenues on the back of technology that was, by the standards of today, relatively unsophisticated. Their competitive advantage came from being embedded in customer workflows, owning valuable datasets and, importantly, becoming difficult to replace.
AI is now challenging that equation. The issue is not simply that artificial intelligence makes software better; the bigger issue is that it is forcing investors, acquirers and customers to reconsider where the value actually sits inside a technology business. For some established proptech companies, that could be uncomfortable. The technology itself may no longer be the asset the market once assumed it was.
The problem with the old software model
Traditional proptech was largely built around interfaces. Users logged in, navigated dashboards, entered information into forms, ran reports, moved between screens and learned how the software worked. The software was the interface through which the customer accessed the underlying capability, and over time that familiarity became part of the productโs defensibility.
AI changes that relationship. Increasingly, the user does not need to know which screen to open or which report to run; they can simply ask the system what they need, and increasingly AI can retrieve the information, interpret it and take action. That is a profound change. If an AI agent can interrogate several systems, extract the relevant information and produce the required outcome, the value of any individual application sitting underneath it potentially falls.
The question becomes: why am I paying for ten pieces of software when an intelligent system can orchestrate the information and functionality I need across all of them? This is precisely the structural threat facing traditional SaaS. The issue is not necessarily that every established application disappears, but that the market may begin to view many of those applications as interchangeable components rather than strategically important technology platforms.
Proptech is particularly exposed
Property technology may be more vulnerable than many other software categories because so much of it was built around information management and workflow automation. Think about the traditional proptech stack: CRM, property management, valuation, listings, market intelligence, document management, lead management, transaction management, maintenance and analytics. Each solved a particular problem, but AI is increasingly capable of sitting across those workflows rather than simply operating inside one of them.
The emerging model looks less like a collection of applications and more like an intelligent operating layer sitting above them. AI can increasingly connect information from multiple systems, understand the context and deliver an outcome without the user necessarily knowing which underlying application provided the information. PwC and ULI have already described the emergence of a potential โproperty operating systemโ built around AI agents, digital twins and integrated data layers operating above โ and potentially eventually replacing parts of โ legacy platforms.
That is potentially much more significant than simply adding a chatbot to a property management system. A chatbot improves an existing product; an AI operating layer potentially changes the architecture of the entire market. The distinction matters because the former protects the incumbent while the latter can undermine the assumptions on which the incumbentโs valuation was built.
The valuation problem
This creates a particularly difficult problem for established proptech businesses. For years, investors valued software companies on recurring revenue, customer retention, growth and margins, and those metrics still matter. But increasingly, investors are asking a different question: how defensible is the software when AI changes the cost of creating functionality?
A company with ยฃ20m of recurring revenue may look attractive if customers are deeply embedded in its platform and switching costs are high. But what happens if an AI-native competitor can deliver 80% of the functionality at a fraction of the cost? Or if a major customer decides it can build an internal AI layer that sits across several existing systems? Or if the customer stops interacting directly with the software altogether?
Andrew Stanton CEO Proptech-PR
Is the governmentโs need to raise more tax delivering two body blows to prime property owners
Thought leadership by Andrew Stanton
Over the years the fortunes of those owning property have been closely tied to the whimsical nature of the Chancellor of the Exchequer. Often what seems a prudent fiscal policy, turns into political and economic folly. The latest cloud on the horizon is adding a new layer of taxation on top of expensive residential properties.
This disadvantages the owners of these โmansionsโ doubly, on the one level they will need to stump up an extra ยฃ2,500 to ยฃ7,500 a year, the second thing it does is create an artificial cliff edge where if property is listed for sale it may well be marketed at a lower figure to entice a buyer and offset this โnewโ cost for a buyer.
Over the years I saw first hand that setting rigid bands where taxation cuts will have a negative effect when it comes to the marketing price of property. Take for example SDLT, if you buy at ยฃ100,000,000 you would pay ยฃ43,750 (ยฃ93,750 if it is a second home), so lowering the overall buying price can push your purchase under higher tax brackets or reduce the taxable portion.
But this โMansion Taxโ is stickier as it is not a one off thing, but an ongoing tax that will just increase. A real disincentive to buy, which may be overcome by the vendor reducing a sale price to act as a sinking fund to offset say the next ten years tax liability, so a ยฃ25,000 haircut gives a new owner some breathing space buying a home at ยฃ2,000,000.
The Labour government may shed few tears for the rich, who own such homes, but the housing market and tax receipts from SDLT are very important, so any stagnation in the big ticket marketplace could offset any new tax receipts. Set out below is the governmentโs position โ I feel it is draconian and ill thought out, time will tell.
โThe government announced the introduction of a new High Value Council Tax Surcharge. From April 2028, owners of properties identified as being valued at over ยฃ2 million will be liable for a recurring annual charge which will be additional to existing Council Tax liability.
This measure is estimated to raise ยฃ0.4 billion in 2029-30. Local authorities will collect this revenue on behalf of central government and will be fully compensated for the additional costs of administering this new tax. Revenue will be used to support funding for local services, with further consideration through the next Spending Review.
Andrew Stanton CEO Proptech-PR
