I'll Believe It This Time Around.. Some of It
This March Q earnings season will be the first time that I will believe some of what Software companies tell us when they say they are cutting heads and the reason is because of AI.
Since the new tranche of models were released in February, much of what Opus 4.6 and Codex 5.4 churn out in terms of code is correct. I’d say 70-80% of what they spit out works. That ratio was maybe 60% in the summer of 2025 and around 40-50% in 2024. The LLMs have come a long way.
Then of course there are the legacy Software companies whose economics are getting crushed by users and companies who are choosing to build their own internal apps or ingesting data via APIs and processing that information through their AI agents.
Those legacy companies are going to see their economics race toward zero.