Counterpoint, why do current state of the art generative AI companies, with the ability to use models that the public can't even access, and the ability to burn tokens at cost, still pay for very expensive Saas software?
Having the ideas necessary to know what to write is where practically all the value lies (caveat: there is value in doing the same as someone else but better, or cheaper.) AI can help with that, but only in so much as telling you the basics or filling in the blanks if you're really stuck. It can't tell you the 'clever bit' because that is by definition new and interesting and doesn't appear in the training data.
What this means is that at some point Anthropic will be able to prompt Opus to clone Jira and never pay an Atlassian bill again. Opus just needs to figure out what Jira is first. It's not there yet.
I bet it would burn a lot of money very fast and not just on tokens.
Bang on, and Jira is the perfect example! Because Jira isn't a bag of features: Jira is a list of features and the way they fit together (well or poorly, depending on your opinion).
That's the second-order product design that it's going to take next-gen coding AI workflows to automate. Mostly because that bit comes from user discovery, political arguments, sales prioritization, product vision, etc. It's a horrendous "art" of multi-variable zero-sum optimization.
When products get it right (early Slack) then it's invisible because "of course they made it do the thing I want to do."
When products get it wrong (MS Teams, Adobe Acrobat, Jira, HR platforms) then it's obvious features weren't composed well.
Expect there's more than one {user discovery} -> {product specification} AI startup out there, working on it in a hierarchical fashion with current AI now.
For the vast majority of companies they would (and should) rather let the SaaS figure that out and focus on their actual company
People always gripe about the poor quality of software staples like Microsoft Office or GitHub or Slack. Why hasn't OpenAI or Anthropic released a superior office suite or code hosting platform or enterprise chat? It would be both a huge cash cow and the best possible advertising that AI-facilitated software development is truly the real deal 10x force multiplier they claim.
If someone invents a special shovel that can magically identify ore deposits 100% of the time, they aren't going to sell it with the rest of the shovelmongers. They're going to keep it to themselves and actually mine gold.
For now though, building smarter models / general integration tooling is a better us of model companies' capital.
Once/if performance gains plateau, expect you'll see them pivot right quick to in-house software factories for easily cloneable, large TAM product spaces, then spin off those products if they're successful.
They have special knowledge to leverage AI to clone (and even improve) huge revenue businesses with high margin. If their claims about the abilities of LLMs are accurate it would be foolish to just leave that on the table.
It would also prove the power of their LLM product as truly disruptive. It would be amazing marketing!
Do you really think they would be out donating trillions of dollars to other companies out of the goodness of their hearts, instead of just bankrupting everyone in the software industry if they could?
If their work on Gemini is this leading world-class stuff, why aren’t Google’s software products not suddenly becoming better?
Was the most recent release of Android demonstrative of a significant uptick in product iteration? Shouldn’t we suddenly be seeing Android pulling far ahead of iOS in an unusually rapid fashion because Apple doesn’t have access to the same quality of shovels?
What about Microsoft Windows 11? Isn’t Microsoft a major OpenAI investor with full access to their latest and greatest?
Why aren’t we seeing release schedules accelerate or feature lists growing at a faster rate?
Supposedly we are selling a lot of shovels here but I don’t see a lot of holes being dug.
Are these Google Play features coming out faster than they used to in a way that coincides with AI adoption?
My main claim revolves around your second sentence: Google is a major primary source of AI research and has access to frontier models before all their customers, especially competitors like Apple who are clearly behind in the AI race and/or not participating in the same way.
In theory, if AI is transformational to developer velocity, Android and all other products under Google’s umbrella should be moving faster than competitors that don’t have early access and preferential wholesale cost AI infrastructure, and they should be clearly iterating faster and better than they did prior to ~2022-2024.
To me, the biggest argument for an AI bubble burst is that companies like Meta and Google won’t actually be able to show their prospective customers that their own workflows have benefitted. Google can’t say “we now ship major [Google Product] features n% faster/better” because there’s no evidence of it. They might make the claim but nobody will believe them.
Major corporations will try the products, start spending $20-200 per engineer per month extra, they’ll see productivity gains of <5% and maybe even see code quality drop, then they’ll decide that the experiment was a bust.
Essentially, this experience will be the most common one: https://www.reddit.com/r/ExperiencedDevs/comments/1r6olcv/an...
My guess is two-fold. One, they are specialized in AI. Two, building another anthropic is a big moat and they like to keep it big vs what you could build with it.
Those apps aren't that bad, it's just internet people complaining about things like react.
Imo "higher quality" isn't a way to sell software
I think in the modern world people would absolutely sell the special shovel, because even if you have a better product that doesn't mean people are going to be using it. You need to have a much better product for a long time for that to happen. And being much better than the competition is hard.
The companies don't lose anything. The employees and executives are not losing anything.
Welcome to business.
Cloning Slack and wasting ultra-expensive engineers on that might be more expensive, and it's not your core mission.
PS. If you're claiming that coding an application is ultra-expensive, you are already entering the argument on the side of the comment you're arguing against, which is making a counterpoint to the article, which claims in the first sentence:
> The math is simple: if it costs almost nothing to build an app, it costs almost nothing to clone an app. And if cloning is free, subscription pricing dies.
Cloning Slack would bring in $0 dollars.
Neither of those software are primarily responsible for the revenue, either. The actual models underlying them are, not the trivial CLI chat interface (which, despite being trivial software, still manages to be full of bugs that go unfixed for months). I also don't even think it's true that Codex is primarily agent-written. OpenAI specifically cited using Electron in their recent Codex desktop application for "agent orchestration" to save human developer time on porting it across platforms, which does not sound like a successful exercise in eating their dog food.
So they say.
Shouldn't they be in place to replace absolutely every other tech company? That is tens of trillions of valuation in short few years.