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Anish Acharya says that it is not appropriate to use AI-supported coding for all business operations.
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AI should focus on core business development, not rebuilding enterprise software.
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The A16z partner said the software stocks that had fallen last week were oversold.
A partner at Andreessen Horowitz says it’s not worth it to vibe code everything.
In an episode of the “20VC” podcast released Monday, Anish Acharya, general partner at A16z, said companies shouldn’t use AI-assisted coding for every part of their business.
He said software accounts for 8% to 12% of a company’s expenses, so using Vibe Coding to create a company’s resource planning or payroll tools would only result in a 10% savings. He said there are also risks in relying on AI to write code.
“You have this innovation bazooka with these models. Why would you point it at rebuilding payroll or ERP or CRM,” Acharya said, referring to enterprise resource planning and customer relationship management software. Salesforce, Microsoft, Oracle, and SAP are among the top providers of such software.
Instead, companies are better off using AI to grow their core businesses or optimize the remaining 90% of their costs, the six-year venture capitalist said.
“Of course, the secular ones will lose. There are specific business models that are going to suffer now,” he said. “But the common story that we’re going to vibe code everything is absolutely wrong, and the entire market is oversold software.”
Acharya’s comments follow a brutal week for software stocks, which dragged down tech and broader markets. The selling started when already cautious investors got nervous Anthropic’s new AI toolWho can perform a variety of clerical tasks for people working in the legal industry.
A16z Partner has joined renowned investor Vinod Khosla in saying that stock prices should be ignored when evaluating the future of tech companies.
On a podcast last month, Khosla dismissed talk of an AI bubble and said investors should not be worried as long as API call volumes, a benchmark of AI usage, remain high.
“If that’s your fundamental metric of what is the actual use of your AI, the utility of AI, the demand for AI, then you won’t see any bubble in API calls,” he said. “What Wall Street does with it, I don’t really care. I think it’s mostly irrelevant.”
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