The Capital Cycle Podcast AI Eats Software?
24 snips
Feb 27, 2026 Tom Wharram, a North American equities analyst at Marathon Asset Management, shares a capital-cycle view on software and AI. He discusses rapid sentiment shifts and a recent software sell-off. He explores whether AI-driven coding and agentic apps increase capacity, widen competition, and pressure pricing. He highlights which mission-critical software may keep strong moats.
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Jacquard Loom Sparked A Capital Cycle Collapse
- Joseph Marie Jacquard invented a punched-card automated loom that encoded complex weaving patterns and boosted productivity.
- Leon silk weavers invested in new looms, output surged, prices collapsed in 1831 and worker uprisings followed.
Productivity Gains Can Wipe Out Industry Profits
- New technology can raise productivity yet destroy an industry's profitability when competitors replicate investments.
- Warren Buffett's textile experience shows individual rational capex becomes collectively self-defeating, neutralising margins industry-wide.
AI Tools Are Accelerating Software Output
- Agentic coding tools and AI have increased software production capacity, shown by a 24% rise in iOS apps in 2025.
- Marathon links the app surge to agentic coding tool launches at the start of 2025, suggesting faster rollout of features and products.
