Intuit investors have been panicking over TurboTax getting killed by agentic AI. Goldman Sachs downgraded Intuit stock to a "sell" (as usual, after it became clear that the stock was at a multi-year low and heading lower) for this reason.
I tested one such agentic AI system, Perplexity Computer for Taxes, on a rather straightforward tax scenario. While impressive in its ability to understand the input data and the tax laws, it was excruciatingly slow, cumbersome to use, needed careful shepherding to eliminate errors, and not designed to e-file returns. It lacked a responsive interface that allows you to peek into tax forms on the fly and see the impact of changes instantly (of the sort TurboTax provides). Every change resulted in a painful churn and another 15 minutes of wait before Perplexity spit something out. The worst part - I was quickly running out of credits with each interaction, with no idea how much more AI effort was left to complete the task (I have the $20 monthly plan).
Add to all this the ever-present possibility of errors (read the Perplexity disclaimer) and the inability to e-file returns, Perplexity Computer does not provide the user experience that TurboTax does (and we take for granted). Perplexity can, of course, build more domain-specific features and user experience, but that's like recreating TurboTax. It may be more natural for solutions like TurboTax to incorporate AI to provide the kind of analysis that Perplexity demonstrates. Also, we haven't touched upon the real cost of AI in all this - that's a whole another topic.
Intuit has antagonized customers by continuously increasing the price of TurboTax without adding more value. TurboTax 2025 looks and works very much like TurboTax 2020. Hopefully, Agentic AI has jolted Intuit into incorporating AI as part of TurboTax to better analyze returns and simplify the preparation and filing process in the future. But for now, the investor panic about AI-based systems killing TurboTax seems like an over-reaction.
It seems to me that in every other area as well, dedicated solutions will win over a generic AI tool. Also, AI service providers like Perplexity have started consumption-based charging and the users have no idea up front how much a given task is going to cost. The narrative that AI is killing seat-based SaaS pricing also works the other way - consumption-based pricing is going to dampen AI usage. I'd like to get other views on all this, especially, your experience using AI for tax prep.