Software Abundance & The Trojan Horse That Comes With It

“How did you go bankrupt? Two ways. Gradually, then suddenly.”

One fascinating thing about AI is that things seem not to change much until they do. Suddenly, AI can do something extremely effectively which it could not do at all just the day before.

And these past weeks are one of those times, and the “emergent capability” this time around is called “reverse engineering.” At least when it comes to software, “everything” is replicable now.

This might not say much right now, and you might think I’m exaggerating (I wouldn’t blame you), but I sincerely believe the things you’re about to see will upend the one-trillion-dollar software industry completely.

This note has two goals:

Show you these incredible things happening in software right now, and how to think about upcoming AI capabilities, since most of them, no matter how different they look, follow the same predictable pattern.

Explore the implications of this newfound reverse engineering capability for the software industry, and define what I believe will be the only software type that will be economically productive in the next few years. Ironically, this type of software is a Trojan Horse you must avoid purchasing by all means. Instead, you should own it.

Is the world ending? No.

Do you need to be prepared for what’s coming? 100%.

Amazing Things are Happening in Software

Let me put it cleanly: AIs can now replicate a lot of software. These have profound and completely non-underestimatable implications for the software industry.

But before I explain why, let’s look at some of the incredible things happening these days and how AI is being used to rebuild some of the most challenging software ever created.

Video games cross the Rubicon

Let’s start with the flashiest examples: video games.

From placing Minecraft inside Elden Ring to having Super Mario battle enemies in Dark Souls, the video game industry is clearly at a turning point, with games being replicated left and right and being released to play for free.

A particularly impressive example was someone porting GTA V into the browser. The demo shows the game running locally in Chrome on a Mac, with its engine compiled to WebAssembly so it can run inside the browser.

An AI literally took GTA’s binaries (files filled with ones and zeros), figured out a good-enough version of the source code, and ported it to WebAssembly so that it could run in a browser like Chrome.

Incredible things are happening, and no video game is safe now, which raises serious concerns about IP, copyright, and the future of an industry where people pour billions into games that now get modded in days.

Modding is the process of player- and fan-authored alteration of a video game.

Naturally, you would assume video game companies are protected by IP and copyright laws. But honestly, I don’t think IP law is ready for this level of massive copyright infringement.

But does patent law protect you from open-source implementations? Interestingly, yes.

In the US, an open-source implementation…

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