While AI automates tasks, it also generates new economic activity. Building and deploying these AI systems requires a new layer of infrastructure services (e.g., Vercel, Render, Cloudflare). This means economic value is shifting to the platforms that enable AI automation.
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With over half of new startup pitches focusing on AI automating existing jobs, the primary solution to this massive displacement is not retraining, but fostering an ecosystem that aggressively creates new companies, new industries, and consequently, new roles.
The biggest opportunity for AI isn't just automating existing human work, but tackling the vast number of valuable tasks that were never done because they were economically inviable. AI and agents thrive on low-cost, high-consistency tasks that were too tedious or expensive for humans, creating entirely new value.
AI's ability to generate ideas and initial drafts for a few dollars removes the high cost of entry for new projects. This "ideation" phase, once proven successful, often justifies hiring human experts for full execution, creating net-new work that was previously unaffordable.
Increased developer productivity from AI won't lead to fewer jobs. Instead, it mirrors the Jevons paradox seen with electricity: as building software becomes cheaper and faster, the demand for it will dramatically increase. This boosts investment in new projects and ultimately grows the entire software engineering industry.
![⚡ [AIE CODE Preview] Inside Google Labs: Building The Gemini Coding Agent — Jed Borovik, Jules thumbnail](https://assets.flightcast.com/V2Uploads/nvaja2542wefzb8rjg5f519m/01K4D8FB4MNA071BM5ZDSMH34N/square.jpg)
The focus on AI automating existing human labor misses the larger opportunity. The most significant value will come from creating entirely new types of companies that are fully autonomous and operate in ways we can't currently conceive, moving beyond simple replacement of today's jobs.
While AI can improve existing software categories, the most significant opportunity lies in creating new applications that automate tasks previously performed by humans. This 'software eating labor' market is substantially larger than the traditional SaaS market, representing a massive greenfield opportunity for startups.
The narrative of AI destroying jobs misses a key point: AI allows companies to 'hire software for a dollar' for tasks that were never economical to assign to humans. This will unlock new services and expand the economy, creating demand in areas that previously didn't exist.
Contrary to fears of mass unemployment, AI will create new industries and roles. While transitional unemployment will occur, the demand for more energy, AI-related regulation (e.g., government lawyers), and new leisure sectors will generate significant job growth, offsetting the displacement from automation.
Flexport uses AI agents for tasks that were previously skipped because they were too costly for human employees, like calling warehouses to confirm addresses. This shows that AI's value isn't just in replacing existing work, but in performing new, marginally valuable tasks at a scale that is finally economical.
Just as electricity's impact was muted until factory floors were redesigned, AI's productivity gains will be modest if we only use it to replace old tools (e.g., as a better Google). Significant economic impact will only occur when companies fundamentally restructure their operations and workflows to leverage AI's unique capabilities.
