AI doesn't kill software demand—it kills software scarcity. When a vertical SaaS tool's price drops from $5M to $50K, competition, not substitution, becomes the silent killer. The software industry isn't dying. It's being sorted.
The most significant capability gains in AI aren't coming from bigger models—they're coming from embedding prediction inside optimization. Generation is becoming a proposal step. The thermodynamic turn is already underway.
The AI advantage won't come from smarter tools, but from organizations that treat intelligence as infrastructure. Scattered deployments compound into complexity and fatigue, not competitive advantage. The firms that thrive will build systems where intelligence accumulates.
Diffused AI strategies yield marginal, replicable gains. Deep concentration in one domain—chosen via three filters: infrastructure needs, workflow centrality, and measurability speed—creates competitive moats. Commitment to execution matters more than perfect selection.