Integration, and mindset. AI, by its general-purpose nature, subsumes software products. Most products today try to integrate AI inside, put it in a box and use to supercharge the product - whereas it's becoming obvious even for non-technical users, that AI is better on the outside, using the product for you. This gives the SOTA AI companies an advantage over everyone else - they're on the outside, and can assimilate products into their AI ecosystem - like the Borg collective, adding their distinctiveness to their own - and reaping outsized and compounding benefits from deep interoperability between the new capability and everything else the AI could already do.
Once one SOTA AI company starts this process, the way I see it, it's the end-game for the industry. The only players that can compete with it are the other SOTA AI companies - but this will just be another race, with nearly-equivalent offerings trading spots in benchmarks/userbase every other month - and that race starts with rapidly cannibalizing the entire software industry, as each provider wants to add new capabilities first, for a momentary advantage.
Once this process starts, I see no way for it to be stopped. Software products will stop being a thing.
Open models can't compete, because they're always lagging proprietary. What they do, however, is ensure the above happens - because if, for some reason SOTA AI companies stick to only supplying "digital smarts a service" for everyone, someone with access to sufficient compute infra is bound to eventually try the end-game strategy with an open model, hoping to get a big payday before SOTA companies respond in kind.
Either way, the way I see it, software industry as we know it is already living on borrowed time.
So suppose ACo attempts to subsume Spotify or Photoshop or whatever. So they ... build their own competing platform internally? That's a lot of work. And now they what, attempt to drive users to it by virtue of it being a first party offering? Okay sure that's just your basic anticompetitive abuse of monopoly I guess. MS got in trouble for that but whatever let's assume that happens.
So now lots of ACo users are using a Photoshop competitor behind the scenes. I guess they purchased a subscription addon for that? And I guess ACo has the home team advantage here (anticompetitive and illegal ofc) but other than that why can't Photoshop compete? It just seems like business as usual to me. What am I missing?
If ACo sells widgets and I also sell widgets, assuming I can get attention from consumers and offer a compelling set of features for a competitive price why can't I get customers exactly? ACo's AI will be able to make use of either widget solution just fine assuming ACo doesn't intentionally sabotage me.
I think the more likely issue is that at some point the cost of building software falls far enough that it ceases to be a viable product category. You just ask an agent for a one off solution and it hands it to you.
Projecting out even farther, eventually the agents get good enough that you don't need to ask for software tools in the first place. You request X, the agent realizes that it needs a tool for that, builds the one off tool, uses it, returns X to you, and the ephemeral purpose built tool gets disposed of as part of the the session history. All of this without the end user ever realizing that a tool to do X was authored to begin with.
So I guess I agree with your end outcome but disagree about the mechanics and consequences of it.
> Open models can't compete
They can though. There's a gap, sure, but this isn't black and white. Plenty of open models are quite useful for a particular task right now.
Any of Meta’s competitors could reproduce Instagram “the software” in every meaningful detail for (let’s say) $100M.
They still don’t have Instagram the product. Reducing that outlay to a few billion tokens doesn’t change that.
I guess I’ll believe this theory when Anthropic or OpenAI rolls out a search engine with an integrated ad platform that can meaningfully compete with Google. How hard can that be?