How artificial intelligence is destroying capital in the knowledge economy

Source Domain: www.afr.com

In 2021, building a minimum viable software product took a team of engineers three months and cost roughly $50,000. In 2026, a single person with an artificial intelligence coding assistant can produce the equivalent over a weekend for a few thousand dollars in application programming interface costs. McKinsey found that generative AI reduced developer task completion times by 20 per cent to 45 per cent across common coding activities.

Start with the accounting. Under international standards, intangible assets must be written down when their carrying value exceeds their recoverable amount. If the cost of replicating a piece of software has fallen by a third to a half, then the intellectual property on thousands of corporate balance sheets is overstated by a corresponding margin.

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