> investors are simultaneously punishing hyperscaler stocks because AI capex might generate weak returns, while destroying software stocks because AI adoption will be so pervasive it renders all existing software obsolete. Both cannot hold simultaneously.
I don't understand this point. Can't it be possible that the ultimate effect is to devalue, hugely, software? As in it can totally both be true that AI capex has weak returns and at the same time most SaaS companies go bankrupt. To take an analogy: if ever we manage to successfully mine asteroids, and find some vast quantity of platinum, it could both be true that every existing platinum miner loses their shirt, and also that the value of platinum sinks so far that the asteroid mining company cannot cover its costs.
It is an AI thing though. AI makes it far easier to create bespoke software targeted at narrow specialized domains, which is the mainstay of modern SaaS. We'll probably see "proper" FLOSS expand into these sectors too, such that the software won't be simply a matter of internal vibecoding by any single business - instead, the maintenance work will be shared.
AI makes it easier to create something, but that thing is not enterprise software with support contracts and conformance to mandatory regulations and 4 hour bug turnarounds and real people on the end of the phone who understand how it works.
Sometimes I just wonder at how HN has no idea what enterprise software involves.
With this kind of niche sector-specific offering, creating a prototype that works properly for what the industry needs is the main hurdle. The rest is just the same sort of ordinary software engineering work that applies to any FLOSS project already - and we know that FLOSS (with optional 3rd party support covering "enterprise" needs) is quite viable.
I don't see AI easily creating a DataDog. You need it for reliability for example.
You can always also deploy open source since forever. What happens when it randomly drops logs or changes the text? If you get an alert and it is noise it starts becoming pointless.
And yet these type of stocks were at 50-100x earnings etc.
I don't understand this point. Can't it be possible that the ultimate effect is to devalue, hugely, software? As in it can totally both be true that AI capex has weak returns and at the same time most SaaS companies go bankrupt. To take an analogy: if ever we manage to successfully mine asteroids, and find some vast quantity of platinum, it could both be true that every existing platinum miner loses their shirt, and also that the value of platinum sinks so far that the asteroid mining company cannot cover its costs.