It always amuses me because the people complaining about stocks going down are always the same people who are causing them to go down. Losing money was a choice that those people collectively made. They could have chosen to act differently, in light of the optimistic long-term future.
Software will be easy to create, which will kill moats and margins on existing products. The game is up for pure saas. Smart money started pricing this in one year ago
> The fear is that these [AI] tools are allowing companies to create much of the software they need themselves.
AI-generated code still requires software engineers to build, test, debug, deploy, secure, monitor, be on-call, support, handle incidents, and so on. That's very expensive. It is much cheaper to pay a small monthly fee to a SaaS company.
AI "generated" code requires a large base of training data to draw from. If we all stop writing code then there will no new code written. Just rehashes of stolen ideas. There is no long tail to this industry or ideal.
> That's very expensive.
As long as you convince someone else to pay the bill who cares? The real problem is are you losing your competitive edge? If everyone else can crank out the same stolen crap you can then there is no reason for you to even exist.
Atlassian tools for a client like mine (hundreds of employees) can easily cover the expense of internalizing it. It's Jira plus confluence mostly, it's not rocket science.
And that's just atlassian.
Start adding stuff that costs many many many yearly salaries (special software for managing inventories and warehouses) it starts making sense to prototype alternatives internally.
I came to the conclusion that if it's not Teams/SharePoint or the moat is on the extreme legal complexity side (e.g. payrolls), you can at least think of building an alternative that is good enough without needing to be perfect.
Lol. ServiceNow, Oracle, Workday, etc are not small monthly fees. That's what the market is shitting on. (Oracle is different, given the corruption and OpenAI grift angle.)
My buddy works for a company like these. He landed a $5M contract last year, which netted him almost $800k. There's alot of fat to be cooked out of this stuff, and AI will help smaller entrants attack those margins.
AI-based startups like Vanta make it much easier for companies to meet the compliance bullshit the large companies require. Again, it will drive more competition == better values for customers.
Haha, maybe… you can stick your head in the sand all you want, but everyone I know whose output is code is delegating 100% of their work to Claude Code today, I cannot see this magically drawing a line at people whose output is configs and emails…
> > The fear is that these [AI] tools are allowing companies to create much of the software they need themselves.
If that's their fear they don't know much how your typical big businesses functions.
You've dealt with a large, consumer bank? Many of them still run on IBM mainframes. The web front end is driven by pushing buttons and screen scraping 3270 terminal emulators. You would think a bank with all it's resources could easily build it's IT infrastructure and then manage all the technology transitions we've gone through over the past few decades. Clearly, they don't and can't. What they actually do is notice they have to adapt to the newfangled IT threat, hired hordes of contractors to do the work, then fire them when done. After it's done they go back to banking and forget all the lessons they've learnt about building and managing IT infrastructure.
If you want to see how banking and computers should be combined, look at the Fintech's, not banks. But for some reason I don't understand traditional banks still out compete Fintech's. Maybe it's getting your head around both banking and running an IT business it too much for one human mind?
That same pattern is repeated everywhere. Why was everyone so scared of Huawei? It wasn't because they built the gear. It's because the phone telco's have devolved into marketing and finance companies who purchase in the gear from companies like Huawei and rent it out. Amazingly they don't know how to run the gear they purchased, instead get the supplier to install it and maintain it. But that meant what some eyes viewed as an organ of the Chinese communist party was running the countries phones with full access to every SMS and voice call. (Interestingly, IBM pulled the same stunt with the banks back in the day: you didn't buy an mainframe, you leased / rented it from IBM, and they maintained it.)
It's the same story everywhere I look. These big firms stick to the knitting. If you want to see total, utter incompetence in IT go work whose core business doesn't revolve around IT for a while. These are the firms that still choose Microsoft, despite the fact they've seen Sony's Microsoft based IT infrastructure torn apart so badly by North Korea they didn't know who their employees were, how much they owed creditors or how much debtors owned them for a while. Why do they choose Microsoft? Look around - who else allows you to outsource the know how about connecting millions of computing devices in 1000's of offices to a redundant cloud infrastructure that allows them to share data while providing a centralised authentication / authorisation infrastructure. There is only one choice, apart from developing it themselves which is out of the question.
If those businesses did start using what passes for AI today to manage and develop their own IT infrastructure, the result would not be pretty. But for all the shit I'm throwing at them here, I'm confident they are smarter than that. They know their limitations, they haven't done it before, and they won't start doing it now.
Hyper custom software can allow your business flows to sync together a lot better than the alternative, using zapier to glue a bunch of mostly poor fits and ending up with Frankenstein processes.
Also, it allows you to pick and choose what you want from where.
We’ve just completed the first month of our internal CRM that has replaced about 500$ a month in subs with something that flows much better and enforces our own internal processes.
If AI can code, why do you think it cannot handle building, testing, debugging, securing, monitoring, supporting, incident handling, and so on?
Consider incident handling. What if your AI sets up monitoring that detects errors or outages, wakes up an agent, gives it the problem context, then sets it to work so it can debug the issue, produce a fix, then deploy it? You now have an end-to-end system that works 24/7. Many issues will probably be resolved before you've even noticed them.
If your response is, AIs won't ever be smart or capable enough to do this as well as humans, how has that same prediction worked out for coding?
The next generation of AI "coding" tools will essentially be SaaS companies in a box. Agents will code the app, but they'll also test it, debug it, support it, etc. And this will happen in months, not years.
1. ai being able to code well seems like it would also get pretty close/good at doing basically everything else you described. If coding is a game of reasoning, if you can solve that, you have effectively solved reasoning and you can likely map it to most other problems provided you have a sufficiently good harness and toolcalling setup.
2. Lets assume AI won't replace everyone as point (1) assumes - and it just replaces _most_ people. Under this assumption, we will likely see large swathes of layoffs. Many SaaS companies have a pay per seat model. Less people employed at companies = less seats being paid for = less SaaS revenue.
So not only is there a threat of companies just vibe coding various SaaS-es in house, but there is also a threat that the TAM of many SaaS products (which is typically proportional to the # of employees there are) will actually _shrink_ in size.
I think the main class of SaaS company that will remain in the medium term are the ones in legally touchy or compliance heavy industries - think healthcare, finance and security (workday for example). But even Workday will be affected by point (2) from above. Overall, I think the mid-long term outlook for SaaS, especially "SaaS", is not great.
> It is much cheaper to pay a small monthly fee to a SaaS company.
How often do software projects underestimate their cost and timeframe?
The LLM-written replacement may prove to be more expensive, but may appear to be cheaper initially when all of the costs and budgets are hidden in the “fog of war”.
How effective will vendor messaging warning clients away from writing their own vendor replacements be? Of course a vendor will play up their strengths and will try to play up the clients’ weaknesses. It’s like asking a used car salesman to give you their opinion of a car on their lot — they aren’t seen as neutral observer.
AI-generated code still requires software engineers to build, test, debug, deploy, secure, monitor, be on-call, support, handle incidents, and so on. That's very expensive. It is much cheaper to pay a small monthly fee to a SaaS company.
But it's also much cheaper to develop an alternative SaaS offering, one that is perhaps more custom, nimble, cheaper than the general SaaS out there today.
In the past, maybe it might have taken 2,000 engineers to build a Figma equivalent. Today, it might take 20.
Software will be cheap to develop so competition will be extremely high. Therefore, SaaS companies should not command a high PE ratio in the stock market anymore.
It's physical companies that should command a higher PE ratio. Energy, materials, and chip companies to be exact. This was reversed pre-LLM era.
Which part of Figma can you build with 20 engineers? I think we're still not close to a small team building real-time collaboration software at scale that actually works at the quality level that customers expect.
Bespoke software development is a huge market. It is incredibly expensive. AI coding agents are not perfect, but just usable enough to be coached through by a semi-IT-literate business person to write some scripts or a little crud site that's needed for a specific LOB task (typically a 30k-250k range project)
The alternatives before were propose the case to IT, and if lucky it gets put on the planning, outsourced to consultants, and delivered 18 months from now for an astronomical investment in both time and cost. Or go at it yourself with Excell and VBA.
The AI thing will be a just 'good enough' barely working clutch of ugly code. Then again, so was most of the consultant produced code.
>It is much cheaper to pay a small monthly fee to a SaaS company.
It's not that cut and dried - it all depends on what your company needs from SaaS and how big it is. SaaS companies like Salesforce don't charge a "small monthly fee" - they charge 10s of millions of dollars per month for large corporations. It's not hard at all to push that money towards AI development and have a better solution built in-house now. Yes, it still takes serious project management skills, but so does integrating Salesforce or other large SaaS software.
I disagree. I think that DHH proved that is not the case with the AWS bill. They saved millions by getting off of it. As software is now 10x cheaper to create, it's going to really wipe enterprise value away from the incumbents. There's going to be companies in the middle where they are fed up with their bills and they innovate in house and get ahead building solutions that are even closer to what they want. Thankfully, this is good for the software market and gives jobs to all those who were laid off at the big tech companies. At least, that's my hope.
Its much cheaper yo devalue the software company via ai hype buy the buisness qnd the integrate the solution behind an ai layer. Aka as the uber proposition. Our taxitokens just got degilded!
Reminds me of that time when Nintendo's stock exploded after the launch of Pokemon go, only for traders to discover a few hours later that Niantic actually owned the game and correct the situation.
A quick way to make me not respect someone's economic opinion is to mention the "Efficient Market Hypothesis." This should be buried 7 palms underground.
Meanwhile, in the real world, as a software developer who uses every possible AI coding agent I can get my hands on, I still have to watch it like a hawk. The problem is one of trust. There are some things it does well, but its often times impossible to tell when it will make some mistake. So you have to treat every piece of code produced as suspect and with skepticism. If I could have automated my job by now and been on a beach, I would have done it. Instead of writing code by hand, I now largely converse with LLMs, but I still have to be present and watching them and verifying their outputs.
I've been coming around to the view that the time spent code-reviewing LLM output is better spent creating evaluation/testing rigs for the product you are building. If you're able to highlight errors in tests (unit, e2e, etc.) and send the detailed error back to the LLM, it will generally do a pretty good job of correcting itself. Its a hill-climbing system, you just have to build the hill.
What an odd article that is just designed to hype the software creation aspect, which doesn't really affect MAGAF.
MSFT went down because of overexposure in AI and because it is clear that people do not want it.
AI weariness is a thing, and if people go off the Internet or advertisers question whether humans or AI swarms are "watching" their ads it is over for the big players.
Trying to salvage the situation by hyping the relatively small code generation (theft) aspect is quite a poor analysis.
Yeah the article doesn't make a lot of sense to me. Guess whose writing software with AI? Software companies.
They mention sites like Base44 and Lovable. Sure, if tons of business was rotating out of software into no code AI solutions the article would have a point. But has a large portion of market cap moved out of AI into a few little no-code startups? Is Salesforce, Service Now, and SAP being replaced with no code applications? No. Absolutely not. These are small, niche companies. It does not explain a large downward movement in an entire industry.
> dedicated software companies [...] are better at using AI to write code
Obviously public market capital cannot rotate into private companies (startups). However it has rotated into non-tech companies, i.e. the firms this article says some believe will benefit from cheaper alternatives/disruptors.
What an odd account that is just created to try sway opinions on hot button topics.
Where have I seen this before? Oh right, the entire site, for months now. Nothing suspicious about that at all, I'm sure a swarm of other brand new accounts will reassure me 0.1 microseconds after being created. You guys sure do type fast!
This article I think is about a very specific subset of software stocks.
If you're holding say a total market index fund, or s&p500, or even qqq or many tech index funds, this would get hidden by the so-far very good growth on other tech stocks.
I was one of the nay sayers but right now I am convinced.
That being said, it still requires some engineering background to come up with interesting ideas and solutions with the help of LLMs but even that might be replaced.
AI replacing vendors feels like a strange risk, though I'm not sure if vendors view things through a technical lens. Security concerns and service maintenance alone, IMO, makes writing internal software a large proposition - one that I would want a trusted vendor if it wasn't a hobby project and I could just afford that. Particularly if that data being lost or broken would severely harm a business.
There are also already frameworks in languages like Python that make putting up an internal website very, very simple. If you don't need production grade, you might have already had a pretty low barrier to entry, if you have the skills to figure out how to host the service you just vibe coded, you can probably figure out some basic django to throw data in its ORM, or find libraries that do the work for you.
AI does feel in those technical ways to be an overstated risk, to me at least.
Far more worrying to me is the breakdown of the USA and its role. We are going to have blocs of software and hardware entirely from competing geopolitical regions, which may not be able or authorized to communicate with one another. Any businesses in the USA with significant CA or EU marketshare right now will decline in value to the degree client companies choose, or are told, to stop using USA systems.
(My own governor in California outright antagonized the Europeans at Davos calling them "pathetic" while telling them to get tough on Trump, which means in practice, stop using US, meaning yes California, tech goods and services. A lot of revenue from tech comes from overseas, and we are going to lose at least some portion of that. Particularly in California which already has budget problems with what revenue it's got. Stunning how even The Guardian treated those remarks as "tough" and not insane and self-destructive... sadly it's nothing compared to the worst of the US right now.)
So, where do you throw investment right now? To the US where the marketshares will likely decline, and the political and trade environment is insanely uncertain, but there is momentum on AI and generally decent hardware design, and the existing software companies and knowledge? To the EU or Canada where maybe a nascent software industry will take hold, or perhaps American companies will relocate talent if the USA collapses into civil conflict? To China, if they end up becoming a hegemon, given their strength in hardware and their growing efforts to invest in software alternatives?
I suppose I read markets don't react to "tensions," and maybe it is unprecedented to modern memory, but I think about these things more than AI.
The Value of software is going down, this much is clear to most people.
It will continue to demand proper engineering for its creation and operation.
But AI will lead to an increase of unique one-of-a-kind systems created by very small teams. And the world will increasingly rely on these unique systems.
SaaS companies need to start reading the writting on the wall, their massive valuations enjoyed when software was harder to create will need to be justified.
No, they dont distrust AI, they now may start to distrust all the big service providers that are likelty to eventually be eradicated by AI now that everyone can prompt a browser. This perhaps will also finally kill Microsoft Access, which is the closest to AI doing the work instead of you for so long. Then all the do-it-yourself enterprise-grade systems became SAAS, so its right for SalesForce and friends to go fck themselves once in a lifetime for standing in the way of actual software ownership.
I know, you are saying - they will adopt. Perhaps, while also cutting 40% (if not more) personnel during the pivot, and perhaps also by facing more challenges by faster moving competition.
Like, look for a second - why didn't Google create what the perplexity newsfeed is, given they actually like did 10 years ago and then close to nobody was using it. The equilibrium seems super unstable. What happens if a smart kid devices way to compress this information 10x times faster. This immediately means neural chips stall.
This volatility is something, not a joke. The second order effects may be unforseeable in an unparalleled way. Besides, the Luddites organize much better in 2026 given reddit etc.
This article crystallizes something I witnessed firsthand last week.
Overheard a guy at a restaurant explaining how he builds phone apps with AI and no coding experience. When asked how he verifies the code works, he said he pastes it into a different AI to explain it.
That's the "slopware" problem in action. The code compiles. It might even work. But there's no understanding of what it's actually doing, no ability to debug when it breaks in production, no awareness of the technical cruft accumulating with every prompt. That's a problem for people creating software for others and is a huge opportunity for software developers to take prototypes and build real stuff.
Does anyone remember the RAD days of the 90s?
On the flip side, for people making software to solve THEIR problems, they don't need to make anything production quality. Its for a single user, themselves! Maybe the LLMs are good enough now that people don't need to buy or subscribe to software that solves trivial problems as they can build their own solutions. Maybe the dream of smalltalk, hypercard, and even early web where anyone can use the computer of what it was meant for is finally here?
the crash is indiscriminate, which is really disheartening. even infra software is getting demolished, no llm is going to replace something like mongodb, but it's all traded under the same umbrella.
The iShares Expanded Tech-Software Sector ETF (IGV) seems to backup what the article is saying. It isolate software firms from the IT industry. It is down about 10% last week, and 20% down the past six months. The IT sector as a whole didn't lose much.
... because they've been driven by years of bad leadership, monopolistic scheming, and investor speculation?
AI is just the latest symptom, IMO.
We normalized growth over revenue. Governments around the world have been pressured by Big Tech to dismantle anti-trust and regulation. We glorified shipping slop, suppressing unions, and pretending like programmers were temporarily embarrassed founders.
The stocks are dropping because our system can't sustain these practices, IMO.
I wonder when a "virtual person" will be able to replace carefully-coded business software?
IE, before software automates a business process, it's typically done by hand, by a real person.
What if someone sells a "virtual person" that's capable of doing the job? What if that "virtual person" is harder to train than a real person, but orders of magnitudes easier than writing custom software or custom business rules?
More importantly: What if the "virtual person" can explain the job they do much better than trying to read source code? That's very useful in ~30ish years when the "virtual person" understands the business process better than the people in the company, and someone is trying to update / streamline processes.
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[ 2.5 ms ] story [ 79.7 ms ] threadGOOG is up 70% over the last year.
"Pummelled" seems extremely sensational...
Software is much easier to create. It used to take 100 people to create a competitor SaaS product. Now it might take 3 people.
Traditional SaaS companies that don't have a data moat is in trouble.
Physical companies will dominate more than SaaS companies in the future. By physical, I mean energy and chips companies.
AI-generated code still requires software engineers to build, test, debug, deploy, secure, monitor, be on-call, support, handle incidents, and so on. That's very expensive. It is much cheaper to pay a small monthly fee to a SaaS company.
AI "generated" code requires a large base of training data to draw from. If we all stop writing code then there will no new code written. Just rehashes of stolen ideas. There is no long tail to this industry or ideal.
> That's very expensive.
As long as you convince someone else to pay the bill who cares? The real problem is are you losing your competitive edge? If everyone else can crank out the same stolen crap you can then there is no reason for you to even exist.
And that's just atlassian.
Start adding stuff that costs many many many yearly salaries (special software for managing inventories and warehouses) it starts making sense to prototype alternatives internally.
I came to the conclusion that if it's not Teams/SharePoint or the moat is on the extreme legal complexity side (e.g. payrolls), you can at least think of building an alternative that is good enough without needing to be perfect.
My buddy works for a company like these. He landed a $5M contract last year, which netted him almost $800k. There's alot of fat to be cooked out of this stuff, and AI will help smaller entrants attack those margins.
AI-based startups like Vanta make it much easier for companies to meet the compliance bullshit the large companies require. Again, it will drive more competition == better values for customers.
If that's their fear they don't know much how your typical big businesses functions.
You've dealt with a large, consumer bank? Many of them still run on IBM mainframes. The web front end is driven by pushing buttons and screen scraping 3270 terminal emulators. You would think a bank with all it's resources could easily build it's IT infrastructure and then manage all the technology transitions we've gone through over the past few decades. Clearly, they don't and can't. What they actually do is notice they have to adapt to the newfangled IT threat, hired hordes of contractors to do the work, then fire them when done. After it's done they go back to banking and forget all the lessons they've learnt about building and managing IT infrastructure.
If you want to see how banking and computers should be combined, look at the Fintech's, not banks. But for some reason I don't understand traditional banks still out compete Fintech's. Maybe it's getting your head around both banking and running an IT business it too much for one human mind?
That same pattern is repeated everywhere. Why was everyone so scared of Huawei? It wasn't because they built the gear. It's because the phone telco's have devolved into marketing and finance companies who purchase in the gear from companies like Huawei and rent it out. Amazingly they don't know how to run the gear they purchased, instead get the supplier to install it and maintain it. But that meant what some eyes viewed as an organ of the Chinese communist party was running the countries phones with full access to every SMS and voice call. (Interestingly, IBM pulled the same stunt with the banks back in the day: you didn't buy an mainframe, you leased / rented it from IBM, and they maintained it.)
It's the same story everywhere I look. These big firms stick to the knitting. If you want to see total, utter incompetence in IT go work whose core business doesn't revolve around IT for a while. These are the firms that still choose Microsoft, despite the fact they've seen Sony's Microsoft based IT infrastructure torn apart so badly by North Korea they didn't know who their employees were, how much they owed creditors or how much debtors owned them for a while. Why do they choose Microsoft? Look around - who else allows you to outsource the know how about connecting millions of computing devices in 1000's of offices to a redundant cloud infrastructure that allows them to share data while providing a centralised authentication / authorisation infrastructure. There is only one choice, apart from developing it themselves which is out of the question.
If those businesses did start using what passes for AI today to manage and develop their own IT infrastructure, the result would not be pretty. But for all the shit I'm throwing at them here, I'm confident they are smarter than that. They know their limitations, they haven't done it before, and they won't start doing it now.
Also, it allows you to pick and choose what you want from where.
We’ve just completed the first month of our internal CRM that has replaced about 500$ a month in subs with something that flows much better and enforces our own internal processes.
Consider incident handling. What if your AI sets up monitoring that detects errors or outages, wakes up an agent, gives it the problem context, then sets it to work so it can debug the issue, produce a fix, then deploy it? You now have an end-to-end system that works 24/7. Many issues will probably be resolved before you've even noticed them.
If your response is, AIs won't ever be smart or capable enough to do this as well as humans, how has that same prediction worked out for coding?
The next generation of AI "coding" tools will essentially be SaaS companies in a box. Agents will code the app, but they'll also test it, debug it, support it, etc. And this will happen in months, not years.
1. ai being able to code well seems like it would also get pretty close/good at doing basically everything else you described. If coding is a game of reasoning, if you can solve that, you have effectively solved reasoning and you can likely map it to most other problems provided you have a sufficiently good harness and toolcalling setup. 2. Lets assume AI won't replace everyone as point (1) assumes - and it just replaces _most_ people. Under this assumption, we will likely see large swathes of layoffs. Many SaaS companies have a pay per seat model. Less people employed at companies = less seats being paid for = less SaaS revenue.
So not only is there a threat of companies just vibe coding various SaaS-es in house, but there is also a threat that the TAM of many SaaS products (which is typically proportional to the # of employees there are) will actually _shrink_ in size.
I think the main class of SaaS company that will remain in the medium term are the ones in legally touchy or compliance heavy industries - think healthcare, finance and security (workday for example). But even Workday will be affected by point (2) from above. Overall, I think the mid-long term outlook for SaaS, especially "SaaS", is not great.
How often do software projects underestimate their cost and timeframe?
The LLM-written replacement may prove to be more expensive, but may appear to be cheaper initially when all of the costs and budgets are hidden in the “fog of war”.
How effective will vendor messaging warning clients away from writing their own vendor replacements be? Of course a vendor will play up their strengths and will try to play up the clients’ weaknesses. It’s like asking a used car salesman to give you their opinion of a car on their lot — they aren’t seen as neutral observer.
In the past, maybe it might have taken 2,000 engineers to build a Figma equivalent. Today, it might take 20.
Software will be cheap to develop so competition will be extremely high. Therefore, SaaS companies should not command a high PE ratio in the stock market anymore.
It's physical companies that should command a higher PE ratio. Energy, materials, and chip companies to be exact. This was reversed pre-LLM era.
The alternatives before were propose the case to IT, and if lucky it gets put on the planning, outsourced to consultants, and delivered 18 months from now for an astronomical investment in both time and cost. Or go at it yourself with Excell and VBA.
The AI thing will be a just 'good enough' barely working clutch of ugly code. Then again, so was most of the consultant produced code.
It's not that cut and dried - it all depends on what your company needs from SaaS and how big it is. SaaS companies like Salesforce don't charge a "small monthly fee" - they charge 10s of millions of dollars per month for large corporations. It's not hard at all to push that money towards AI development and have a better solution built in-house now. Yes, it still takes serious project management skills, but so does integrating Salesforce or other large SaaS software.
On the other hand, these type of companies are really hard to value too.
MSFT went down because of overexposure in AI and because it is clear that people do not want it.
AI weariness is a thing, and if people go off the Internet or advertisers question whether humans or AI swarms are "watching" their ads it is over for the big players.
Trying to salvage the situation by hyping the relatively small code generation (theft) aspect is quite a poor analysis.
They mention sites like Base44 and Lovable. Sure, if tons of business was rotating out of software into no code AI solutions the article would have a point. But has a large portion of market cap moved out of AI into a few little no-code startups? Is Salesforce, Service Now, and SAP being replaced with no code applications? No. Absolutely not. These are small, niche companies. It does not explain a large downward movement in an entire industry.
> dedicated software companies [...] are better at using AI to write code
Obviously public market capital cannot rotate into private companies (startups). However it has rotated into non-tech companies, i.e. the firms this article says some believe will benefit from cheaper alternatives/disruptors.
Where have I seen this before? Oh right, the entire site, for months now. Nothing suspicious about that at all, I'm sure a swarm of other brand new accounts will reassure me 0.1 microseconds after being created. You guys sure do type fast!
If you're holding say a total market index fund, or s&p500, or even qqq or many tech index funds, this would get hidden by the so-far very good growth on other tech stocks.
That being said, it still requires some engineering background to come up with interesting ideas and solutions with the help of LLMs but even that might be replaced.
AI replacing vendors feels like a strange risk, though I'm not sure if vendors view things through a technical lens. Security concerns and service maintenance alone, IMO, makes writing internal software a large proposition - one that I would want a trusted vendor if it wasn't a hobby project and I could just afford that. Particularly if that data being lost or broken would severely harm a business.
There are also already frameworks in languages like Python that make putting up an internal website very, very simple. If you don't need production grade, you might have already had a pretty low barrier to entry, if you have the skills to figure out how to host the service you just vibe coded, you can probably figure out some basic django to throw data in its ORM, or find libraries that do the work for you.
AI does feel in those technical ways to be an overstated risk, to me at least.
Far more worrying to me is the breakdown of the USA and its role. We are going to have blocs of software and hardware entirely from competing geopolitical regions, which may not be able or authorized to communicate with one another. Any businesses in the USA with significant CA or EU marketshare right now will decline in value to the degree client companies choose, or are told, to stop using USA systems.
(My own governor in California outright antagonized the Europeans at Davos calling them "pathetic" while telling them to get tough on Trump, which means in practice, stop using US, meaning yes California, tech goods and services. A lot of revenue from tech comes from overseas, and we are going to lose at least some portion of that. Particularly in California which already has budget problems with what revenue it's got. Stunning how even The Guardian treated those remarks as "tough" and not insane and self-destructive... sadly it's nothing compared to the worst of the US right now.)
So, where do you throw investment right now? To the US where the marketshares will likely decline, and the political and trade environment is insanely uncertain, but there is momentum on AI and generally decent hardware design, and the existing software companies and knowledge? To the EU or Canada where maybe a nascent software industry will take hold, or perhaps American companies will relocate talent if the USA collapses into civil conflict? To China, if they end up becoming a hegemon, given their strength in hardware and their growing efforts to invest in software alternatives?
I suppose I read markets don't react to "tensions," and maybe it is unprecedented to modern memory, but I think about these things more than AI.
SaaS companies need to start reading the writting on the wall, their massive valuations enjoyed when software was harder to create will need to be justified.
I know, you are saying - they will adopt. Perhaps, while also cutting 40% (if not more) personnel during the pivot, and perhaps also by facing more challenges by faster moving competition.
Like, look for a second - why didn't Google create what the perplexity newsfeed is, given they actually like did 10 years ago and then close to nobody was using it. The equilibrium seems super unstable. What happens if a smart kid devices way to compress this information 10x times faster. This immediately means neural chips stall.
This volatility is something, not a joke. The second order effects may be unforseeable in an unparalleled way. Besides, the Luddites organize much better in 2026 given reddit etc.
Overheard a guy at a restaurant explaining how he builds phone apps with AI and no coding experience. When asked how he verifies the code works, he said he pastes it into a different AI to explain it.
That's the "slopware" problem in action. The code compiles. It might even work. But there's no understanding of what it's actually doing, no ability to debug when it breaks in production, no awareness of the technical cruft accumulating with every prompt. That's a problem for people creating software for others and is a huge opportunity for software developers to take prototypes and build real stuff.
Does anyone remember the RAD days of the 90s?
On the flip side, for people making software to solve THEIR problems, they don't need to make anything production quality. Its for a single user, themselves! Maybe the LLMs are good enough now that people don't need to buy or subscribe to software that solves trivial problems as they can build their own solutions. Maybe the dream of smalltalk, hypercard, and even early web where anyone can use the computer of what it was meant for is finally here?
It's just correction.
AI is just the latest symptom, IMO.
We normalized growth over revenue. Governments around the world have been pressured by Big Tech to dismantle anti-trust and regulation. We glorified shipping slop, suppressing unions, and pretending like programmers were temporarily embarrassed founders.
The stocks are dropping because our system can't sustain these practices, IMO.
however those system of record apps - will outlast most "A.I" companies - since the effective data is within their systems
IE, before software automates a business process, it's typically done by hand, by a real person.
What if someone sells a "virtual person" that's capable of doing the job? What if that "virtual person" is harder to train than a real person, but orders of magnitudes easier than writing custom software or custom business rules?
More importantly: What if the "virtual person" can explain the job they do much better than trying to read source code? That's very useful in ~30ish years when the "virtual person" understands the business process better than the people in the company, and someone is trying to update / streamline processes.