The article applies Jevons Paradox to AI coding, arguing that as software becomes as cheap as water and electricity, previously unaffordable enterprises will become customers, unleashing a long‑tail of fragmented, on‑site software demand that rewards programmers with deep industry knowledge.
Anthropic’s CFO Krishna Rao explains how AI firms treat compute as a lifeblood, why mismatched capacity can cause bankruptcy or loss of market position, and how the company uses the “cone of uncertainty”, scenario‑based planning, cross‑chip scheduling, and massive forward contracts to balance cost and performance.
Anthropic’s new credit‑based pricing for Claude, massive multi‑chip compute investments, and the CFO’s warning that buying too little or too much compute is dangerous together illustrate how rising hardware costs and Jevons paradox are driving the AI industry’s ever‑increasing subscription fees.
Despite headlines claiming AI will replace developers, hiring for engineering roles has surged to record highs, a trend explained by the 19th‑century Jevons paradox where efficiency gains actually expand total resource consumption, reshaping the software industry’s demand dynamics.
The article explains how DeepSeek’s low‑cost large‑language‑model training reduces GPU price pressure, yet paradoxically fuels greater demand for Nvidia hardware by lowering entry barriers, illustrating the modern Jevons paradox and its broader economic and societal implications.
