2026-03-03T11:24:01.227Z
- Stripe CEO Patrick Collison advocated for on-demand software in the age of AI on the podcast TBPN.
- Anthropic’s Claude AI update caused a decline in software stocks and impacted the SaaS business model.
- Nvidia CEO Jensen Huang dismissed concerns that AI will replace the traditional software tools industry.
Stripe CEO Patrick Collison published a provocative paper about the future of software in the age of AI.
Collison appeared on the TBPN podcast last week and told hosts John Coogan and Jordi Hayes that software should not be mass-produced, but created on demand.
“Software should be like pizza, cooked on the spot the moment you use it,” Collison says. “Traditionally, the economics of software have been thought of as a fixed cost that can then be monetized indefinitely.”
“When inference costs and custom creation come into play, things change dramatically,” Collison added. “This is a kind of non-Walrasian software regime.”
Collison’s analogy reflects a broader tension gripping the tech industry over whether AI tools can replace, rather than simply augment, traditional software.
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That fear briefly became a reality for the market in early February. The release and update of Anthropic’s Claude AI, particularly enterprise features such as Claude Cowork and automation plugins, caused a significant decline in software stocks as investors worried that AI could automate tasks that once required licensed software or human expertise.
The selloff wiped out billions of dollars in market capitalization and sent a wide range of software ETFs and company names plummeting as investors interpreted Claude’s expanding capabilities as a threat to traditional SaaS business models that rely on recurring licensing revenue. The iShares Expanded High-Tech Software Sector ETF is down nearly 30% since the beginning of 2026 as of March 2. IBM has been among the biggest losers among software companies, with its stock price falling 13% on February 23, its worst decline in 26 years.
Aside from the drop in stock prices, not everyone sold. At the recent Cisco AI event, Nvidia CEO Jensen Huang dismissed the idea that the tools industry is in decline and will be replaced by AI.
“You can see that there are a lot of software companies whose stock prices are under a lot of pressure because they are going to be replaced by AI for one reason or another,” Huang said. “It’s the most illogical thing in the world and time will tell.”
