Software stocks came under pressure again this week. The trigger was a research report arguing that AI sets a downward economic spiral in motion: machines take over jobs, people spend less, companies invest even more in AI to cut costs, and so on.
A fascinating thought experiment. But we look at it differently.
With the arrival of AI coding agents, SaaS companies are in real trouble. Tools like Claude Code make it possible to build working applications without a technical background. That is a big part of the market correction we are seeing.
The real question is whether that is actually a disaster.
We think not. This may be one of the biggest opportunities non-tech companies have ever been handed.
Custom software used to be extremely expensive. So it was perfectly logical that a tool covering 70 percent of your needs was the best option. The last 30 percent you left alone, or you got creative trying to inch closer to 100. Nobody was happy with that situation, except the SaaS vendors.
With AI coding agents, the price of custom software will fall dramatically. Thousands of companies that spent years working with software that only half fitted now get the chance to build tools that align perfectly with their sector, business model and IP. The productivity gain that comes with that is enormous. And that gain does not go to software vendors; it goes to the companies themselves.
There will not be less software written, but exponentially more. And so more developers will be needed, not fewer. Coding agents automate part of the work, but demand for software is growing faster than the tools can keep up.
The transition comes with challenges, we know. Business models built on the limits of software-as-a-service will need to be fundamentally rethought. And that is exactly the opportunity.
We can only be optimistic about that.