Building in the age of AI

Software is expensive to create. You have to pay people to create it, maintain it, and distribute it. Because software is expensive to create, it has to make money. And we pay for it–software licenses, SaaS, per seat pricing, etc. Software margins have historically been an architectural envy–90+% margins and zero marginal cost of distribution.

Software is expensive because developers are expensive. They are skilled translators–they translate human language into computer language and vice-versa. LLMs have proven themselves to be remarkably efficient at this and will drive the cost of creating software to zero. What happens when software no longer has to make money? We will experience a Cambrian explosion of software, the same way we did with content.