Previously, building bespoke software for niche internal problems was too expensive. AI agents dramatically lower this cost, allowing companies to create custom-fit solutions for 99% of their problems, ending the era of contorting workflows to fit generic, off-the-shelf tools.

Goldman's CIO notes AI has dramatically reduced the cost and time to create internal applications. This is causing a strategic shift back toward building software in-house, especially for smaller tools, leading to the termination of some third-party vendor contracts.

Instead of only investing in tech, Sequoia builds it. The firm employs as many developers as investors to create proprietary tools. This includes an AI system that summarizes business plans, analyzes team quality, and maps competitive dynamics, giving partners an immediate, data-rich overview of opportunities.

Wilkinson’s CFO, with no prior coding experience, used AI tools to build a sophisticated, customized portfolio management dashboard. This replaced Adapar, a service costing up to $100k annually, demonstrating how AI empowers non-engineers to build complex internal tools and disrupt expensive enterprise software.

For decades, buying generalized SaaS was more efficient than building custom software. AI coding agents reverse this. Now, companies can build hyper-specific, more effective tools internally for less cost than a bloated SaaS subscription, because they only need to solve their unique problem.

AI is drastically reducing software development costs. This makes it economically viable for small teams to build highly-focused applications for niche markets, such as specific skilled trades, that were previously too small to attract venture capital-backed software companies.

Enterprises are empowering non-technical employees to build bespoke internal tools with AI, replacing expensive SaaS products. This saves hundreds of thousands of dollars and creates solutions perfectly tailored to specific workflows, freeing them from the constraints of third-party roadmaps.

A 700-person bank, which historically would always buy third-party software, now builds custom applications using AI tools like Codex. This reversed their "build vs. buy" equation, enabling them to create perfectly tailored solutions while saving hundreds of thousands of dollars on vendor contracts.

Chamath notes that $4T of the $5T software market is services and maintenance. Elite tech companies avoid this by building custom software. AI now democratizes this capability, allowing mainstream companies to build bespoke solutions and escape the inefficient off-the-shelf software trap.