Marc Andreessen made a dire software prediction 15 years ago. Now it’s happening in a way nobody imagined

Fortune

by Nick Lichtenberg

February 13, 2026

AI-Generated Deep Dive Summary

Fifteen years ago, venture capitalist Marc Andreessen predicted in his influential essay “Why Software Is Eating the World” that software would dominate industries such as retail, media, and telecommunications. His prophecy has largely come true, with companies like Amazon, Netflix, and Skype reshaping global markets. However, a new development has taken the tech world by surprise: artificial intelligence (AI) is now disrupting even the software sector itself. In 2011, Andreessen argued that software would transform traditional industries by automating processes and creating digitally wired economies. He foresaw the rise of companies like Amazon and Netflix, which have indeed revolutionized their fields. But today, AI’s capabilities extend beyond what he imagined. By enabling software to contextually understand unstructured data—such as emails, documents, and verbal communication—AI is expanding the scope of automation in ways that could fundamentally alter how businesses operate. Morgan Stanley analysts have highlighted three key risks posed by generative AI: reduced workforce needs due to task automation, lower demand for software subscriptions, and a potential decline in enterprise software prices. If AI can handle tasks that previously required human input, companies may cut their staff—and consequently, the number of software tools they need—by significant margins. This shift has led to concerns about the sustainability of the software-as-a-service (SaaS) model, which Andreessen’s firm, a16z, heavily invests in. The rise of AI represents a new phase of creative destruction, where even the disruptors of yesterday face challenges from emerging technologies. While Andreessen’s predictions were largely accurate, the rapid advancements in AI have introduced unexpected complexities to the software landscape. This evolution underscores the dynamic nature of the tech industry and highlights the importance of adaptability for businesses looking to thrive in an era dominated by intelligent systems. Ultimately, the interplay between AI and software signals a transformative shift in how work is done and value is created. While Andreessen’s vision has been realized, the rise of AI suggests that even the most forward-thinking predictions can be eclipsed by technological progress. For businesses, understanding this evolving landscape will be critical to navigating future challenges and opportunities.

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Originally published on Fortune on 2/13/2026