zlacker

>>peteth+(OP)
> The fear is that these [AI] tools are allowing companies to create much of the software they need themselves.

AI-generated code still requires software engineers to build, test, debug, deploy, secure, monitor, be on-call, support, handle incidents, and so on. That's very expensive. It is much cheaper to pay a small monthly fee to a SaaS company.

>>latefo+G02

  AI-generated code still requires software engineers to build, test, debug, deploy, secure, monitor, be on-call, support, handle incidents, and so on. That's very expensive. It is much cheaper to pay a small monthly fee to a SaaS company.

But it's also much cheaper to develop an alternative SaaS offering, one that is perhaps more custom, nimble, cheaper than the general SaaS out there today.

In the past, maybe it might have taken 2,000 engineers to build a Figma equivalent. Today, it might take 20.

Software will be cheap to develop so competition will be extremely high. Therefore, SaaS companies should not command a high PE ratio in the stock market anymore.

It's physical companies that should command a higher PE ratio. Energy, materials, and chip companies to be exact. This was reversed pre-LLM era.