Nearly all my rich friends are stressing out about the value of their companies and business efforts in a rapidly changing world. They are always on the run trading time for income and suddenly they see AI lowering the “cost of intelligence” and delivering continuously improving work.
My rich buddies sell their time, that's why this is dangerous for them.
They are finally starting to realize that AI is coming for old business models.
Meanwhile, the bulk of my wealthy friends couldn't care less.
Lesson there.
Being truly wealthy means having your money make money for you, and using that leverage to unlock time affluence.
Once you have time affluence you can do anything you want, including building more wealth engines to further increase your time affluence. That’s exactly what the driven ones do.
You see, the rich are experts at trading their time for money, meanwhile the wealthy trade expertise, access to relationships and other rare resources in exchange for activating more income streams + gaining allies in the defense (and expansion) of their empire.
The rich don’t own as much IP as the wealthy do. They don’t have significant equity across industries currently enjoying margin expansion and growth acceleration thanks to AI. The rich see AI coming for their high incomes and they don't have as many developed assets flowing money back to their empires. They don't have a ton of time affluence to develop them, either.
They can’t capture the value they are starting to lose.
Am I personally worried?
Investing in technology companies and building other wealth engines is the bulk of what I do besides building new AI systems and writing about the rapid acceleration of science and technology, spurred on by offshoots of machine learning. I welcome our machine overlords 😁.
Side Note: It's never too late to start building your own wealth system. A wealth system is an intelligently integrated group of wealth engines. Find out more by subscribing below 👇
While ChatGPT and the broader LLM-boom of 2023 certainly got some of my smarter and more forward-looking friends curious… most of them dismissed the negative impact AI would have on their business. In fact, I heard a lot of this:
“It’ll help me get research done faster.”
“One less employee to hire. Works for me.”
“We get our agreements out the door quicker, all for that.”
And to be fair, in my own businesses and across our portfolio companies I see AI adding efficiencies in many disciplines: sales, marketing, customer success, product & engineering.
So what’s the problem?
Agents.
The rise of an Agentic Economy has massive implications for people who purely trade time for money.
Let’s explore why.
Rise of the Agentic Economy
The agentic economy represents a paradigm shift in how we interact with technology and conduct business. It's a future where intelligent agents, acting autonomously and often in concert, become the primary drivers of economic activity. This isn't science fiction anymore; the convergence of several key technological advancements has laid the foundation for this transformative era.
The journey towards the agentic economy began with the rise of artificial intelligence, particularly machine learning. Early AI focused on rule-based systems, but the advent of deep learning and neural networks allowed computers to learn from vast amounts of data, enabling them to recognize patterns, make predictions, and even generate creative content.
This breakthrough in AI provided the "brain" for intelligent agents.
Concurrently, advancements in natural language processing (NLP) allowed computers to understand and generate human language, making it possible for humans to interact with AI systems in a more natural and intuitive way. This was crucial for enabling agents to communicate with users and other agents effectively.
The development of cloud computing provided the scalable infrastructure needed to train and deploy large AI models and support the complex interactions of numerous agents. Cloud platforms made AI resources accessible to a wider audience, accelerating the development and deployment of agent-based applications.
Finally, the rise of APIs and microservices created the building blocks for composable software systems. APIs allow different software applications to communicate and exchange data with each other, creating the foundation for agents to interact with and orchestrate various services.
Remember the word “composable”… that’s going to be very important soon.
These technological advancements, working in concert, have paved the way for the emergence of sophisticated, autonomous agents capable of performing complex tasks, automating workflows, and even making decisions on behalf of users.
Hello, Operator?
OpenAI Operator is a new AI agent that can perform tasks on the web for you.
It can automate various tasks by interacting with a web browser much as a person would, via mouse clicks, scrolling, and typing.
Right now you may be thinking:
“Matt, Operator takes 18-minutes to do what my personal assistant can do in 5 and my virtual assistant can do in even less time for even less money… why should anyone worry about AI Agents?”
Because this is the slowest this technology will be. And the least effective. And the least convenient.
This is the most error-riddled agents will ever be.
The destiny of technology is to push continuously down on cost while pulling up on experience. We are blessed to be alive during this technology-driven intelligence explosion.
But there are complications coming.
Complications that will add TRILLIONS to the markets and enrich the wealthy elite even more.
The time-trading rich have a real problem… thanks to those agents.
Now it’s time to dive deeper into a key driver in all this: composability.
Designing agents with the idea that they will interact and build upon each other is crucial for scaling their capabilities and creating truly intelligent, complex systems — that is what composability delivers.
Imagine individual agents as specialized smart tools. Composability allows you to combine these tools to achieve tasks that would be impossible for a single agent alone. Think of it like Lego bricks – individual bricks are useful, but their true power comes from combining them into complex structures. This leads to an exponential growth of possible functionalities as you add more agents.
Instead of reinventing the wheel every time you need a specific function, you can leverage existing, well-designed agents. This dramatically increases development efficiency and allows developers to focus on building new, innovative capabilities.
In Short: Designing for composability is not just a good practice, it's a necessity for building the next generation of intelligent agents. It presents both exciting opportunities and significant challenges, but the potential rewards are enormous. The future of AI likely hinges on our ability to master the art of agent composition.
This agent-to-agent future means us humans will largely be cut out of the value creation and delivery exercise… entirely.
It also means current intermediary layers are in deep trouble. Entire industries and business models, even.
Who am I talking about?
Software companies.
All of them.
Goodbye SaaS, We Barely Knew You
(…but we hated you)
Composable agents abstract away the complexities of individual applications. Instead of interacting with multiple different apps, a user (or another agent) could interact with a single agent that orchestrates all the underlying applications. This simplifies the user experience and automates tasks that previously required manual interaction.
This abstraction is where significant value can accrue.
Don’t get lost in the Wall St Speak… I am saying that’s where the money is made.
If the “value accrues” someplace other than your industry, your industry dies.
Economically speaking, so do you.
Agents can learn user preferences and context, providing a highly personalized experience that traditional apps struggle to match. This personalized, context-aware interaction becomes incredibly valuable.
As more agents and applications become composable, the value of the agentic layer increases exponentially. This network effect can create a powerful moat, making it difficult for new entrants to compete.
The seamless integration and automation provided by composable agents drastically reduce user friction. Users no longer need to learn different interfaces or switch between multiple applications.
This streamlined experience is highly desirable. Users demand it and expect it now.
Why Traditional Software Companies Are at Risk
Agents will disintermediate traditional software companies by sitting between the user and the application.
This means that companies that rely on direct user interaction might lose control over their customer relationships and potentially their revenue streams.
If agents can easily switch between different applications that provide similar functionality, the value of individual applications could be commoditized. Companies that don't differentiate themselves might find it difficult to compete.
In an agent-driven world software companies lose control over the user experience - for the first time in their history. Agents could customize the way users interact with their applications, potentially in ways that the companies don't anticipate or approve of.
The rise of composable agents is a disruptive force that could reshape the software landscape. Traditional software companies that fail to adapt are indeed at risk. However, those that embrace agent integration, focus on specialization, and develop their own agent strategies can not only survive but thrive in this new era. The value will likely shift towards the agentic layer, but the underlying specialized applications will still be necessary – the key is for software companies to position themselves correctly within this evolving ecosystem.
If they don’t, they’ll see the Agentic Economy take their marketshare.
…but won’t they potentially make money simply powering the AI brains behind these agents?
Decentralization puts that business model at risk, too.
Decentralized AI to Power the Agentic Layer
Decentralized AI has the potential to drastically reduce the cost of training and running large AI models. This is because it distributes the computational burden across a network of participants, rather than relying on expensive centralized infrastructure. Lower costs make it more accessible for smaller players and individuals to develop and deploy sophisticated agents, democratizing access to this technology.
Decentralized AI lowers the barrier to entry for agent development.
This is going to lead to waves and waves of new agents hitting the net every day.
Individuals and smaller teams can now afford to train and deploy powerful agents without needing massive capital investment. This fosters innovation and creates a more level playing field. Decentralization fosters a more competitive environment, which in turn drives faster innovation. With more players involved in the development and deployment of agents, new ideas and approaches are more likely to emerge.
The reduced costs and increased accessibility offered by decentralized AI will accelerate the growth of the agentic economy. More individuals and businesses will be able to participate, leading to a rapid expansion of the ecosystem.
Decentralized AI opens up new possibilities for business models. For example, individuals could earn money by contributing their computational resources to the network or by developing and selling specialized agents.
A more competitive environment will lead to the development of more innovative and higher-quality agents. This will ultimately benefit users by providing them with better and more affordable services. The combination of a thriving agentic economy and decentralized AI has the potential to drive significant economic growth. Increased productivity, new business models, and greater innovation can all contribute to a more prosperous future.
Decentralized AI is a game-changer for the agentic economy. By reducing costs, increasing accessibility, and fostering innovation, it will accelerate the growth of this new economic paradigm and unlock its full potential. While challenges remain, the potential benefits are enormous, and the future of AI is undoubtedly intertwined with the decentralization movement.
Think about it: for years, we’ve been building these amazing AI models, getting computers to learn, predict, and even create. But now, we're taking it to the next level. We're giving these AI brains bodies, so to speak – intelligent agents that can act autonomously, interact with each other, and basically run the show. It's like giving software a serious upgrade, turning it from a passive tool into an active participant in the economy.
And the game-changer here? Remember, composability. These agents aren't just working in isolation; they're designed to work together, like a team of all-stars. One agent might be a master negotiator, another a logistics wunderkind, and together they can achieve things that would be impossible for a single agent alone. That's the power of the agentic economy.
For the software companies out there and their stakeholders, this is a wake-up call. The old model of building standalone applications is going to be disrupted. Agents are going to become the new interface, sitting between users and your software.
You've got two choices: adapt or become obsolete.
You need to make your software agent-friendly, build those APIs, and embrace the agent ecosystem. Otherwise, you're going to get left behind.
Think about the possibilities: personalized AI assistants that anticipate your needs + have a sense for what you are driving toward, autonomous businesses run by networks of intelligent agents, decentralized marketplaces where agents buy and sell goods on your behalf.
It's a whole new world, and it's coming fast.
The agentic economy is not just the future of software; it's the future of business, the future of work, and frankly, the future of how we live.
Get ready, because things are about to get wild.
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Great insights. With Decentralized AI, apart from compute, we also have data privacy and can provide Agents with Identity and credentials to transfer value on our behalf. We can thus create an autonomous organization (or an evolving organism) which offers services to create value. As Matt would say, you create an autonomous wealth engine.