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.

Founders should focus on how AI can replace or augment human labor and services, which constitute the vast majority of enterprise budgets, rather than just layering AI onto existing software.

According to OpenAI co-founder Andrej Karpathy, the true impact of AI code generation is less about a linear speedup on existing tasks. Instead, it expands the scope of what's feasible, allowing engineers to attempt projects they would have previously deemed not worth the effort or beyond their skillset.

AI platforms like Anthropic and OpenAI are seeing unprecedented revenue growth because they're augmenting and competing with human labor costs. This is a far larger market than traditional IT budgets, enabling multi-billion dollar revenue months.

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.

Traditional software automated standardized processes but struggled with complex human interactions like call center support. Generative AI's ability to understand natural language allows software to automate these nuanced tasks, dramatically expanding the total addressable market by tackling problems that were previously impossible to solve with code.

Most view AI for efficiency, but its true power lies in handling routine tasks to free up human talent. This unlocks capacity for strategic, creative, and relationship-driven work that fuels innovation and growth, shifting the question from cost savings to new capabilities.

The massive investment in AI seems disproportionate to the software market's size. However, its true potential is in automating and augmenting the services industry, which is 25 times larger than software, thus justifying the spend.