Has the cost of building software just dropped 90%?
December 10, 2025
Domain knowledge is the only moat
So where does that leave us? Right now there is still enormous value in having a human ‘babysit’ the agent – checking its work, suggesting the approach and shortcutting bad approaches. Pure YOLO vibe coding ends up in a total mess very quickly, but with a human in the loop I think you can build incredibly good quality software, very quickly.
This then allows developers who really master this technology to be hugely effective at solving business problems. Their domain and industry knowledge becomes a huge lever – knowing the best architectural decisions for a project, knowing which framework to use and which libraries work best.
Layer on understanding of the business domain and it does genuinely feel like the mythical 10x engineer is here. Equally, the pairing of a business domain expert with a motivated developer and these tools becomes an incredibly powerful combination, and something I think we’ll see becoming quite common – instead of a ‘squad’ of a business specialist and a set of developers, we’ll see a far tighter pairing of a couple of people.
This combination allows you to iterate incredibly quickly, and software becomes almost disposable – if the direction is bad, then throw it away and start again, using those learnings. This takes a fairly large mindset shift, but the hard work is the conceptual thinking, not the typing.
Source: Has the cost of building software just dropped 90%? – Martin Alderson
I’ve made reference to the Yogi Berra quote: “Predictions are hard, particularly about the future,” more than once in my career.
Why is predicting the future so challenging? It’s because of not the first-order effects but the second-order effects, and in particular, the economic impacts of change, which is extremely hard to envision.
If the cost of building software is dramatically reducing due to AI, and it’s a reasonable size, one that I’d be willing to back up, then then what happens when the price of producing software is massively less? Do software engineers no longer have a job, or does a lot more software get produced? History would suggest it’s more likely to be the latter. And then what’s our role? What’s our opportunity? What’s our challenge? What’s the risk?
This is a really good essay that I think anyone who works in software engineering should read and then take on board
