AI Overthrow: Displacing Software's Dominance through Artificial Intelligence
The software industry, a behemoth employing millions, is bracing for a seismic shift as Artificial Intelligence (AI) looms on the horizon. According to recent predictions, AI is expected to displace 20% of jobs in the period of 2024-2025, escalating to 80% by 2027-2028.
This impending displacement is not confined to the 5 million developers and related roles within the software sector. With AI's potential to replace a significant portion of the 100 million jobs currently associated with the industry, the impact is set to be profound. As the moats are drained, the walls are breached, and the barbarians aren't just at the gates—they're in the throne room.
The dominance of AI infrastructure and applications is concentrated among a select few companies, with AI models following a similar trend. The value of these AI companies, such as OpenAI with a valuation of $90 billion and less than 1000 employees, underscores this concentration of wealth.
The value of software, which once hinged on scalability, network effects, and zero marginal cost, is now its Achilles' heel. These very features that made software successful make it vulnerable to instant AI replacement. This isn't disruption—it's displacement. Not evolution—it's extinction. Not transformation—it's termination. The software industry as we know it is ending, and what replaces it will employ a fraction of the people with a concentration of power that would make the robber barons blush.
No clear replacement employment is evident, and skills are becoming obsolete in months due to AI. However, not all hope is lost. Leading companies like Atlassian are integrating AI by acquiring startups, such as The Browser Company, to embed AI into software workflows by 2026. This hybrid approach, where AI assists human developers, is expected to dominate rather than AI fully replacing developers in software.
The predictions of Creative Destruction 2.0 are not Schumpeter's gradual evolution but a category 5 hurricane making landfall on the entire software industry. If Schumpeter were to witness AI's version, he might reconsider whether capitalism, as we know it, can survive its own essential fact turned against itself.
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