Comment by 7777777phil
2 days ago
Even a16z is walking this back now. I wrote about why the “vibe code everything” thesis doesn’t hold up in two recent pieces:
(1) https://philippdubach.com/posts/the-saaspocalypse-paradox/
(2) https://philippdubach.com/posts/the-impossible-backhand/
Acharya’s framing is different from mine (he’s talking book on software stocks) but the conclusion is the same: the “innovation bazooka” pointed at rebuilding payroll is a bad allocation of resources. Benedict Evans called me out on LinkedIn for this (https://philippdubach.com/posts/is-ai-really-eating-the-worl...) take, which I take as a sign the argument is landing..
> investors are simultaneously punishing hyperscaler stocks because AI capex might generate weak returns, while destroying software stocks because AI adoption will be so pervasive it renders all existing software obsolete. Both cannot hold simultaneously.
I don't understand this point. Can't it be possible that the ultimate effect is to devalue, hugely, software? As in it can totally both be true that AI capex has weak returns and at the same time most SaaS companies go bankrupt. To take an analogy: if ever we manage to successfully mine asteroids, and find some vast quantity of platinum, it could both be true that every existing platinum miner loses their shirt, and also that the value of platinum sinks so far that the asteroid mining company cannot cover its costs.
SaaS companies were just overvalued. They had crazy multiples. Not even an AI thing.
It is an AI thing though. AI makes it far easier to create bespoke software targeted at narrow specialized domains, which is the mainstay of modern SaaS. We'll probably see "proper" FLOSS expand into these sectors too, such that the software won't be simply a matter of internal vibecoding by any single business - instead, the maintenance work will be shared.
3 replies →
The best take I've seen on the whole `AI will replace all devs' is a way for big tech to walk back the disastrous over hiring they did around Covid without getting slaughtered in the stock market.
I don't understand this take. The market tends to positively value layoffs.
However, admitting to have massively over hired and wasted a lot of money does not make the management involved look good. No one wants to admit they made a massive blunder.
The market doubly rewards companies that lay off workers and have a story about how they're automating everything with AI, even if that story is just a story.
> Benedict Evans called me out on LinkedIn for this take, which I take as a sign the argument is landing.
Excellent. And correct lol.
The fact that this is getting downvoted gave me a hearty chuckle. Never change, HN.
How is AI code generation a "innovation bazooka"? Last time I checked, innovation required creativity, context, and insight. Not really fast boilerplate generators.
AI allows innovative people to create more innovations by reducing a lot of the non-innovative grunt work in an efficient manner. It isn't the AI doing the innovation, but allows innovators to focus more on innovating.
Or at least that is the theory. It is certainly true from observations of those around me. It also scales well. Even someone a bit innovative gets a multiplier by using AI intelligently. Those that just focus on the grunt work are the ones in trouble.
All that is correct and well-written, however I fear in most cases "good enough" will be good enough for Business. If Business can do something to 80% the same but with a large cost cutting they likely go for it, we have seen this with shrinkflation (reduced portion sizes for the same price), to using cheaper ingredients to practically everything that is not a knowledge-heavy industry. The big change is now the "shrinkflation" is coming to knowledge domains too, which will likely lower the quality of healthcare, software etc.
AI being a next-token predictor will produce cheap and average products, we will likely see some (most?) software become a commodity, that goes through the same product development and "manufacturing" as a breakfast cereal. Made in a "dark factory", 24/7, with little supervision.
However I think down the line we will see many industries popping up that are like "organic food", "mechanical watchmaking" that provide above the usual slop that large businesses produce.
> Even a16z is walking this back now. I wrote about why the “vibe code everything” thesis doesn’t hold up in two recent pieces:
The next one a16z should walk back on is "AGI" given that they have just admitted that "vibe code everything" was just a sign of them being consumed by the hype.