Chamath @ 01:09:14Inconclusive
aieconomy
Global annual spending on software and software-related activities, currently around $5 trillion, will shrink by roughly an order of magnitude over time, to about $500 billion per year, as AI drastically lowers the cost of producing and delivering software.
You know how much the world spends on software and software related things. Every year it's about $5 trillion... I, I'm pretty sure that the market here shrinks by an order of magnitude. And instead of fighting over 5 trillion, I think we'll be fighting over 500 billion.
Explanation
Chamath’s prediction is explicitly about what will happen “over time” with no concrete date or horizon attached, so it is a long‑run structural forecast rather than a 1–2 year call.
As of November 30, 2025:
- Estimates of global enterprise software spending and broader “software and software-related” spending (including IT services, cloud, etc.) have not fallen by anything close to 10x. If anything, major analyst firms continue to project continued growth in worldwide software and IT services spending through the late 2020s rather than a collapse.
- However, the claim is that AI will eventually drive the cost base down so much that total annual spend compresses from about $5T to ~$500B. Because no specific date (e.g., by 2030/2035) was given, current data can’t falsify a forecast that could be many years or even decades out.
Since:
- The predicted 10x shrinkage clearly has not occurred yet, but
- The prediction does not specify a time frame, and there is no widely accepted evidence that such a long‑run outcome is impossible,
the status of the prediction as of now must be marked as inconclusive (too early) rather than right or wrong.