32% of orgs skipped a software purchase because they could build it with AI
A research paper out of arXiv is putting numbers on what a lot of operators are already feeling: AI coding agents are quietly reshaping the build-vs-buy calculation for software.
The Core Finding
In an organizational survey, 32 percent of respondents said their organization skipped at least one software purchase because they could build the functionality using coding agents instead. The researchers are careful to note these are self-reports, and the actual spending displaced or the reliability of the tools built was not verified.
The Benchmark Progression
The paper introduces the concept of a software substitution frontier: the set of functions an organization could build and maintain at an acceptable standard for less than buying them. The authors tracked how fast that frontier is moving.
Since 2023, the length of benchmark tasks that leading agents can complete at 50 percent success, measured in human working time, has doubled roughly every 129 days. The researchers describe this as an extrapolation, not a forecast of customer switching.
What Else the Paper Found
- A broad search turned up 575 potential open-source alternatives to selected commercial products, though some functional matches still need independent validation.
- A project called the Craft suite produced 12 application repositories over 12.0 days of public development. The authors flag these as early versions with unverified completeness and reliability.
- Market signals are mixed: purchased software actually gained US investment share, and tracked commercial installations grew during the same period.
The Warning the Authors Flag
The paper’s most operator-relevant point is the lag risk. Customers’ capacity to build could start affecting individual buying decisions well before a broad purchasing shift becomes visible in market data. In other words, the signal may appear account by account before it shows up as a category trend.
For solo operators and small teams already running coding agents, the build-vs-buy recalculation is not theoretical. It’s a spreadsheet question you can run today.
I’m founder of BizStack at Cagri Sarigoz LLC and a passionate advocate for entrepreneurs.
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