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I am confused about the whole situation let me explain.

It seems like all software will get replaced it by local versions. Suppose I am an individual or a business that was using a SaaS product (such as JIRA).

Let's be generous and imagine that the monthly payout was $20/month for that software (usually for businesses, it is much higher) and one fine morning I login and point a multi modal AI agent to it and clone the whole thing for my local use in let's say 3 months worth of $20/month AI subscription.

Now what? Gradually, that software company would go out of business but that user won't be subscribing forever either to AI inference service and the only constant customer of AI inference would have been the software company which went out of business so... No software company, no AI inference business either?

If I understand your question correctly, it reduces the value of software to almost zero. Meaning all of the SaaS companies are going to have to work very hard to diversify their revenue streams into value added services. That's going to be very difficult or impossible for most to navigate. Hence the term in the industry "SaaSpocalypse."

Some companies will retain a moat. For example, YouTube holds incredible IP, and until AI can replicate that wealth of content at scale for cheap, it will remain profitable. Facebook has the user critical mass. Increasingly, hardware for inference is going to be a moat. So is electricity.

Which loops back to my comment above: this breaks a lot of the market dynamics required for a functioning economy. Accelerationists are convinced that we'll invent new jobs to replace the old jobs, but I don't think that's going to happen. Certainly not at the pace of change we're seeing.

Basically only moat left are either if you have "Data" or "Compute". Software layer is worthless and pretty much reproducible.

Data as in YouTube is all just data. Building a website and app around it isn't the hard problem. Anyone can launch another YouTube in few months but that would be pointless.

Yes, and increasingly, data will no longer be a moat either. These models will be capable of creating all the data/content we could ever want. There will always be a market for "organic" movies with real actors, but we should expect the value of that to decline precipitously.

My investment thesis is currently around these strata:

1. Electricity. All analysis shows massive shortages beginning now with no end in sight. Western governments in particular have massively dropped the ball on this one.

2. Chip design and production. Nvidia and TSMC dominate here for a few reasons. Partners required in the supply chain like ASML benefit, but they're not really the bottleneck right now. We're seeing a lot of investment pouring into this space and we'll see competent design competition (especially from Google's TPUs, and potentially from Apple and AMD). Chip fab is very difficult to get right, and takes a long time to ramp up. See the NAND space.

3. AI labs. These guys are doing to get commoditised. They're trying very hard to prevent distillation but I think it's impossible. The open weight models are not far behind, and the Chinese labs are getting very creative about how they work with limited hardware. If anything, they'll decrease inference cost over time, reducing the value of existing data centers (of which OpenAI and Anthropic have purchased an enormous amount). I am very bearish on the future value of OpenAI and Anthropic.

4. Software. So much software. Everyone gets software. The companies which benefit from this will be able to monetise it. Google, for example, might put ads into VERY capable and free AI. People might accept that. Microsoft has been investing heavily into their data centers, and maybe that's their revenue center in the future. Especially securely hosted services. I expect massive growth in this space in the short term. As long as people still have high paying jobs, they'll pay for well made software and tailored services.

> As long as people still have high paying jobs, they'll pay for well made software and tailored services.

Here's the question. Which high paying jobs will remain? People will still be needed, obviously, but salaries would be in a race to the bottom without some form of govt intervention.

YouTube requires a hell of a lot of infrastructure and Compute to do well

The name "universal high income" should be tipping you off to the issue with it. If money has less importance then what tools will individuals have to change their station? How will anyone other than the permanently entrenched rulers affect change? We don't have a good system now, but it seems like we're hell bent on making it even worse.

Edit: UBI being pushed by asset owners is a step towards Blade Runner rather than Star Trek.

My naive hope is democracy, so we need to defend it.

What does this even mean? What does a fair democracy even look like nowadays, that can't be bought or externally influenced?

I cannot envision any future reality where an ASI bows to any human. The only entrenched rulers will be the AI themselves.

Once ASI starts having its own bank accounts, its done.

> On the other hand, unlimited intelligence democratises products and services in a revolutionary way. Everyone will be able to do whatever they like in digital space for basically free. No more purchasing software. Make any app/company/website/blog/movie/show/game/forum you can think of. This will quickly bleed into the physical space, with real-world products and services becoming logarithmically cheaper. A true future of abundance.

This isn't happening yet, SaaS is only growing more in the era of AI. Anecdotally, my own small SaaS has only grown instead of shrunk as well.

https://www.stripeeconomics.com/p/the-saaspocalypse-was-more...

I'd like to see AI "democratize" the world, but I have a much more pessimistic outlook. One thing we see with technological revolutions is that (once the dust settles) they provide general improvements for all strata of societies. But as some boundaries are erased, others are magnified a hundredfold wherever robber barons can stake an exclusive claim.

If genuine AGI is developed, its everyday conveniences may continue to be shared with the common masses, but the powers that own the technology and the data centers will have no incentive to give everyone access equal to superintelligence, and that includes giving governments the same access.

Every stage of the industrial age has seen powerful, wealthy people/groups (whether you call them oligarchs or industrialists or whatever) become able to exert disproportionate power over the state, and we're already in a place where this is happening. Humans have shown time and again that once you have some resource (whether it be oil, gold, or data centers), someone will want to own all of it, and that they're always willing fight for that ownership, and this fight rarely benefits ordinary humans like us.

Developed countries have been enjoying an unusually long peace time thanks to the wonders of capitalism and the emergence of stable, progressive capitalist-friendly democracies. The road to utopian basic income and limitless leisure is going to be fraught with riots and violence, and make Marx suddenly utterly relevant once again, because there's too much at stake, and too stark a division between the haves and the have-nots.

The alternative timeline is one where governments get together to regulate AI into some kind of international agreement under the UN. That requires taking power away from the private corporations; historically, that's been a tough sell.

> If genuine AGI is developed

If AGI ever comes to fruition, it won't come as a subscription plan.

I believe that the middle ground for this is to keep all these jobs orchestrating agents or whatever the AI future invents for us, but with lower wages. The golden era of dev wages will be gone. There is no incentive for companies paying people 100-500k-1m to write prompts and debug agents, independent of their level.

This might be how it shakes out but I don't think it's acceptable, and I don't think white collar workers will think it's acceptable. Taking high income people and making them low income people (usually for life) has a tendency to politically radicalise people. Especially in light of the unprecedented productivity and profits which businesses will experience. People will demand a slice of the pie.

One kind of intervention that could work would be licensing, like with some engineering professions. Make it illegal to work on software without a professional license; same as with doctors. Engineers would be free to work with AI, but the final responsibility would fall on them.

This artificial control works to prevent oversupply and protect salaries. Unfortunately, the businesses calling the shots won't ever allow this to happen.

That’s dystopian. I would hope it never happens!

So? They'll be declared domestic terrorists and that'll be that. I mean, you cannot demand something from an entity that doesn't care about you, doesn't need anything from you, and over which you have no leverage.

I would say, be afraid and use the fear (not to ruminate, but to organise and do things), but also be optimistic, and use that, too (not to imagine what people will do then when they're not doing it now, but to believe it's possible helping making it reality, now).