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A16z partner says that the theory that we’ll vibe code everything is wrong

2026-02-2022:47190275www.aol.com

Vibe coding everything is just not worth it, says A16z partner Anish Acharya.

Anish Acharya
The A16z GP said that software stocks have been completely oversold.Harry Murphy/Sportsfile for Collision via Getty Images

  • Anish Acharya says it is not worth it to use AI-assisted coding for all business functions.

  • AI should focus on core business development, not rebuilding enterprise software.

  • The A16z partner added that software stocks that took a beating last week were oversold.

Vibe coding everything is just not worth it, says an Andressen Horowitz partner.

On an episode of the "20VC" podcast released on Monday, A16z general partner Anish Acharya said that companies shouldn't use AI-assisted coding for every part of their business.

He said that software accounts for 8% to 12% of a company's expenses, so using vibe coding to build the company's resource planning or payroll tools would only save about 10%. Relying on AI to write code also carries risks, he said.

"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 develop their core businesses or optimize the remaining 90% of their costs, said the venture capitalist of six years.

"Of course, there will be secular losers. There are specific business models that are now going to be disadvantaged," he said. "But the general story that we're going to vibe code everything is flat wrong, and the whole market is oversold software."

Acharya's comments follow a brutal week for software stocks, which dragged down tech and broader markets. The sell-off started when already-wary investors panicked about Anthropic's new AI tool, which can perform a range of clerical tasks for people working in the legal industry.

The A16z partner joins famed 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 talks of an AI bubble and said investors should not be concerned as long as API call volume, a benchmark of AI usage, remains high.

"If that's your fundamental metric of what's the real use of your AI, usefulness of AI, demand for AI, you're not going to see a bubble in API calls," he said. "What Wall Street tends to do with it, I don't really care. I think it's mostly irrelevant."

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Comments

  • By 7777777phil 2026-02-2023:427 reply

    Even a16z is walking this back now. I wrote about why the “vibe code everything” thesis doesn’t hold up in two recent pieces:

    (1) https://philippdubach.com/posts/the-saaspocalypse-paradox/

    (2) https://philippdubach.com/posts/the-impossible-backhand/

    Acharya’s framing is different from mine (he’s talking book on software stocks) but the conclusion is the same: the “innovation bazooka” pointed at rebuilding payroll is a bad allocation of resources. Benedict Evans called me out on LinkedIn for this (https://philippdubach.com/posts/is-ai-really-eating-the-worl...) take, which I take as a sign the argument is landing..

    • By noosphr 2026-02-227:491 reply

      The best take I've seen on the whole `AI will replace all devs' is a way for big tech to walk back the disastrous over hiring they did around Covid without getting slaughtered in the stock market.

      • By somenameforme 2026-02-2211:502 reply

        I don't understand this take. The market tends to positively value layoffs.

        • By graemep 2026-02-2218:11

          However, admitting to have massively over hired and wasted a lot of money does not make the management involved look good. No one wants to admit they made a massive blunder.

        • By rwmj 2026-02-2212:34

          The market doubly rewards companies that lay off workers and have a story about how they're automating everything with AI, even if that story is just a story.

    • By selridge 2026-02-212:061 reply

      > Benedict Evans called me out on LinkedIn for this take, which I take as a sign the argument is landing.

      Excellent. And correct lol.

      • By crsv 2026-02-223:25

        [flagged]

    • By mrwh 2026-02-227:191 reply

      > 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.

      • By re-thc 2026-02-228:441 reply

        SaaS companies were just overvalued. They had crazy multiples. Not even an AI thing.

        • By zozbot234 2026-02-2210:182 reply

          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.

          • By rwmj 2026-02-2212:331 reply

            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.

            • By zozbot234 2026-02-2213:17

              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.

          • By re-thc 2026-02-2214:44

            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.

    • By Derbasti 2026-02-2210:341 reply

      How is AI code generation a "innovation bazooka"? Last time I checked, innovation required creativity, context, and insight. Not really fast boilerplate generators.

      • By gilbetron 2026-02-2216:15

        AI allows innovative people to create more innovations by reducing a lot of the non-innovative grunt work in an efficient manner. It isn't the AI doing the innovation, but allows innovators to focus more on innovating.

        Or at least that is the theory. It is certainly true from observations of those around me. It also scales well. Even someone a bit innovative gets a multiplier by using AI intelligently. Those that just focus on the grunt work are the ones in trouble.

    • By rvz 2026-02-2210:32

      > Even a16z is walking this back now. I wrote about why the “vibe code everything” thesis doesn’t hold up in two recent pieces:

      The next one a16z should walk back on is "AGI" given that they have just admitted that "vibe code everything" was just a sign of them being consumed by the hype.

    • By ricardobayes 2026-02-229:37

      All that is correct and well-written, however I fear in most cases "good enough" will be good enough for Business. If Business can do something to 80% the same but with a large cost cutting they likely go for it, we have seen this with shrinkflation (reduced portion sizes for the same price), to using cheaper ingredients to practically everything that is not a knowledge-heavy industry. The big change is now the "shrinkflation" is coming to knowledge domains too, which will likely lower the quality of healthcare, software etc.

      AI being a next-token predictor will produce cheap and average products, we will likely see some (most?) software become a commodity, that goes through the same product development and "manufacturing" as a breakfast cereal. Made in a "dark factory", 24/7, with little supervision.

      However I think down the line we will see many industries popping up that are like "organic food", "mechanical watchmaking" that provide above the usual slop that large businesses produce.

    • By ksec 2026-02-2822:05

      >In this article I will try to explain why I find his framing fascinating but incomplete. Evans structures technology history in cycles. Every 10-15 years, the industry reorganizes around a new platform: mainframes (1960s-70s), PCs (1980s), web (1990s), smartphones (2000s-2010s). Each shift pulls all innovation, investment, and company creation into its orbit. Generative AI appears to be the next platform shift, or it could break the cycle entirely.

      A lot of the AI and LLM argument on whether it is really eating the world misses one point, and I think Evans implied but not pointed out explicitly.

      Had it not been AI investment, we wouldn't have the current hardware improvement and innovation rate.

      Most people have heard about the limit of Moore's law, but every single time it appeared in headline is an economic model limit rather than limit of physics. We were predicting a stop to growth in 90s because we couldn't see a 400M PC market shipment in 2010. Turns out Smartphone carried that forward, and it is what funded growth of TSMC when most on HN even knew much or heard of TSMC. The same goes with LPDDR RAM, Pure Play IP, Wireless, Network, etc. All the hardware improvements that came with Smartphone is now continued to be developed at rapid pace due to AI and Hyperscaler.

      What Evan were suggesting is much simpler, could AI automate things that previously were not possible for 99% of business outside of Tech and Software. The answer is a simple yes. And worth pointing out ChartGPT is closing in on a billion weekly active user.

      A lot of HN discussion about AI often centered around software development. And whether it is good enough of it. Most of the world outside are happy enjoying AI for many things. What used to require a mildly technical person to do on excel can not be done without one. It is opening up software to even more people. It is creating more value than people imagine, and users are willing to paid for it.

  • By koliber 2026-02-2211:342 reply

    Using vibe coding to build a small specialized tool for a small company that can be used instead of single feature of a commercial SaaS is doable and brings value.

    Using vibe coding to build something to replace an enterprise SaaS offering for a medium to large company is not something to be taken lightly. The tool and the code is not everything. The operating environment, security guarantees, SLAs, support, and a bag of features you don't need today but might tomorrow is what the SaaS offerings bring to the table.

    Imagine that I run a really good software house. I can literally build anything you want, feature wise, better than most. I do it quickly. You come to me and say you want to replace Slack for your team of 200, because Slack got too expensive. I say I can do it. Because I am feeling generous and you're my good friend, I will do it for free. However, I will just give you the code, a CI/CD script, and a README.md file. I will disappear and will not maintain or support your software, nor will I give you any guarantees on how well it will work, other than a "trust me."

    I wouldn't take the offer.

    • By lumost 2026-02-2216:311 reply

      The question is how much further and faster can these tools evolve.

      Right now, you may not be faced with a valid choice to vibe code your own hubspot, but maybe some contractor firm will do it for you and sell an ultra low cost version.

      Will opus 6 do the same thing without the contractors while managing the deployment and maintenance as a claw?

      • By koliber 2026-02-2415:48

        As with cold fusion, I think the answer is "it will happen", but no one can predict how soon.

    • By zozbot234 2026-02-2213:132 reply

      The Matrix folks have covered the "replace Slack internal chat" case already. They will give you the code so that you can bring the service up internally, or you can use any 3rd party hosted solution that provides the usual support and "enterprise" guarantees, for a price. Why can't this model generalize to sector-specific SaaS offerings that can now be prototyped cheaply via AI vibecoding?

      • By cowpig 2026-02-2213:581 reply

        Zulip is an actual slack upgrade

        • By notpushkin 2026-02-2215:49

          Or Mattermost, or Rocket.Chat, or... there’s tons of alternatives now. That’s not the point.

      • By kelnos 2026-02-2219:31

        As much as the Slack UX has somewhat enshittified at this point, the UX of Matrix is still so so so far behind Slack that it's often not even worth considering.

        I hear Zulip could actually be a real alternative, though I have no experience with it.

  • By manoDev 2026-02-213:036 reply

    People are overestimating the value on having AI create something given loose instructions, and underestimating the value of using AI as a tool for a human to learn and explore a problem space. The bias shows on the terminology (“agents”).

    We finally made the computer able to speak “our” language - but we still see computers as just automation. There’s a lot of untapped potential in the other direction, in encoding and compressing knowledge IMO.

    • By preommr 2026-02-224:16

      Because that would mean AI isn't going to replace entire industries, which is the only way to justify the, not billions, but trillions in market value that AI leaders keep trying to justify.

    • By jamesmcq 2026-02-221:41

      Exactly my thoughts - the value in AI is not auto-generating anything more than something trivial, but there's huge value in a more customized knowledge engine - a targeted, specific Google if you will. Get answers to your specific question instead of results that might contain what you were looking for if you slog through them.

      AI is hugely beneficial in understanding a problem, or at least getting a good overview, so you can then go off and solve/do it yourself, but focusing on "just have the AI generate a solution" is going to hugely harm AI perception/adoption.

    • By themafia 2026-02-2120:051 reply

      > AI create something

      To have AI recreate something that was already in it's training set.

      > in encoding and compressing knowledge IMO.

      I'd rather have the knowledge encoded in a way that doesn't generate hallucinations.

    • By fsddd 2026-02-214:561 reply

      Problem space is rich. The thing doesnt actually know what a problem is.

      The thing is incredibly good at searching through large spaces of information.

    • By georgeecollins 2026-02-2214:56

      Right! It's like maybe the AI is more of a threat to the accounts payable person than the accounts payable software. At least in terms of head count.

    • By qudat 2026-02-2214:40

      100% agree. I’d add we are underestimating our contributions in making the code agents do the right thing as well.

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