Casado, a lifelong developer, states he never would have guessed AI would become so proficient at coding. He identifies it as the single area where AI has surprised him most, suggesting a multi-trillion dollar market opportunity.
Related Insights
Once AI coding agents reach a high performance level, objective benchmarks become less important than a developer's subjective experience. Like a warrior choosing a sword, the best tool is often the one that has the right "feel," writes code in a preferred style, and integrates seamlessly into a human workflow.
In 10 years, AI will generate vast amounts of high-quality code, similar to the leap in image generation. The developer's role will shift from writing code to curation and design, exercising intent and critical judgment to select the best output from a sea of AI-generated options.
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.
The perception of AI coding assistants has shifted. They are no longer just tools for a productivity boost but are becoming a fundamental, non-negotiable part of the modern developer's workflow. This implies an eventual market penetration approaching 100%, drastically changing the market size calculation.
Contrary to the idea that AI will eliminate the need to code, it's making coding a crucial skill for non-technical roles. AI assistants lower the barrier, allowing professionals in marketing or recruiting to build simple tools and automate tasks, giving them a significant advantage over non-coding peers.
AI acts as a massive force multiplier for software development. By using AI agents for coding and code review, with humans providing high-level direction and final approval, a two-person team can achieve the output of a much larger engineering organization.
The role of a senior developer is evolving. They now focus on defining outcomes by writing tests that a piece of code must accomplish. The AI then generates the actual implementation, allowing small teams to build complex systems in a fraction of the traditional time.
AI-assisted development, or "vibe coding," is re-engaging executives who coded earlier in their careers. It removes the time-consuming friction of going from idea to MVP, allowing them to quickly build personal tools and reconnect with the craft of software creation, even with demanding schedules.
To effectively interact with the world and use a computer, an AI is most powerful when it can write code. OpenAI's thesis is that even agents for non-technical users will be "coding agents" under the hood, as code is the most robust and versatile way for AI to perform tasks.
The value generated by 30 million developers worldwide is estimated at $3 trillion. AI tools that augment or disrupt this work are tapping into a market equivalent to the GDP of a major economy, making it the first truly massive market for AI.