Stanford MS&E435 Economics of the AI Supercycle | Spring 2026 | Applications, Coding AI
TL;DR
Vercel founder Guillermo Rauch explains how AI coding agents have expanded the software development market by 10-100x, driving a fundamental shift from traditional web services to 'agentic infrastructure' where tokens replace pixels as the primary commodity and deployment becomes the critical value creator.
🤖 The Agentic Software Revolution 3 insights
AI expands addressable developer market by 10-100x
The arrival of coding agents like Opus 4.5 has democratized software creation far beyond the traditional 20 million developers, enabling non-programmers to build and deploy applications at unprecedented scale.
Agents inherently prefer deployment over local storage
Unlike human developers who succumb to 'works on my machine' bias, coding agents naturally deploy immediately, making infrastructure layers that facilitate deployment the critical 'jelly' to agents' 'peanut butter'.
Software evolves from instant pages to long-running agents
The cloud is transitioning from request-response web pages to autonomous agents that may cook for hours or days to complete complex tasks like creating and maintaining entire companies.
🧱 The Block Economy & Infrastructure 3 insights
Reusable components achieve agent ecosystem dominance
Agents prefer efficient building blocks over reinventing solutions, giving shadcn/ui a 90.1% market share and establishing Next.js as the de facto standard for agent-generated deployments.
Vercel's support agent resolves 93% of inquiries
The company deployed an AI support agent that now handles nearly all customer questions, improving efficiency while enabling free support for a much larger user base.
Modern cloud requires 'Amazon Agent Services' not AWS
If launched today, AWS would be called 'Amazon Agent Services' (AAS) because the fundamental cloud entity has shifted from human-written code on EC2 to autonomous agents requiring long-thinking infrastructure.
💎 Token Economics & Business Models 3 insights
Tokens replace pixels as the core cloud commodity
Vercel has evolved from streaming pixels to streaming intelligence, with tokens becoming the fundamental unit of value that must be cached, secured, and accelerated like traditional content.
AI Gateway functions as CDN for tokens
The new infrastructure primitive caches, load-balances, and secures AI tokens across providers like Claude and Gemini, optimizing the delivery of intelligence similarly to how CDNs optimized web content.
Seat-based SaaS pricing gives way to token economics
Traditional per-seat subscription models are being disrupted by token-based pricing that measures actual intelligence consumption, reflecting the shift from human users to agentic compute as the primary value driver.
Bottom Line
Build or adopt agentic infrastructure that enables AI to deploy and run autonomously rather than just generate code, while preparing for a token-based economy where agents become the primary consumers of compute and software services.
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