Naval called it.
Software was eaten by AI.
— Naval (@naval) March 14, 2026
And the market already agreed.
Atlassian down 75%. HubSpot down 69%. Figma down 86%.
This isn’t a correction. It’s a repricing of an entire industry in real time.
Here’s what’s actually happening:
For 20 years, software was the scarce resource. You needed engineers to build it, maintain it, and scale it.
That scarcity created trillion dollar companies.
The best ones charged monthly fees forever just to access tools that used to require entire IT departments.
That scarcity is gone.
When anyone can spin up a functional product in a weekend with Claude, the software itself stops being the moat.
What’s left? Distribution. Data. The system behind it. The relationships. The trust.
The SaaS model was always a bet that software would stay hard to build. That bet is now underwater.
And the layoffs tell the same story.
Atlassian cut 1,600 people. Block cut 4,000 – 40% of their workforce.
Stock went up 20% the same day. Amazon eliminated 16,000 corporate roles.
Salesforce trimmed another 1,000.
38,000 tech jobs in six weeks. Every CEO pointing at the same reason.
These aren’t failing companies. Atlassian has a $40B market cap. Block is profitable. Amazon is printing money. They’re not cutting because business is bad.
They’re cutting because the old model – where human headcount scaled with output – is now broken.
We’re not in a software correction. We’re in a software replacement.
The companies that survive this aren’t the ones with the best code.
They’re the ones that figured out what their business actually is – underneath the software layer that used to protect them.
Peter Steinberger figured this out before almost anyone.
He built OpenClaw alone. One laptop. One developer. Nine months in Austria with no team, no co-founder, no office.
OpenAI acquired it. Sam Altman announced it personally.
That’s the new baseline for what one person with the right system can build.
Naval has been right about most things early.
When he says software is being eaten by AI – I’d pay attention.
The repricing isn’t done.
This is the beginning of a multi-year collapse of every business that was really just a software wrapper.
What survives is what was always real underneath it.
My two cents.
-DM