The Great AI Repricing

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AI has been making headlines for years. There isn’t a day that goes by when you don’t see it in a major news outlet.

For good reason: it’s changing how we live and how we work.

This week, I want to zoom in on what that actually means for you and your financial life, especially in light of the recent selloff in software and AI-related tech stocks. Trillions in market value have been erased as investors reprice who really wins in an AI-native world.

Markets are usually the best truth-finders in any room. They punish weak business models and reward durable ones. They are forward-looking machines.

For the last few years, markets have loved AI-driven capex spending. The liquidity has been intoxicating. That spending helped drive a powerful wealth effect across the economy. If you’ve owned global equities or U.S. growth stocks over the last few years, your portfolio is likely larger than it was three years ago, largely thanks to the expansion in U.S. growth stocks.

But in the last few weeks, the market has started telling us why it is repricing parts of the software and AI complex. It has everything to do with what we all spend a third of our lives doing: work.

Most of the software companies in your portfolio sell on a per-seat basis. If a company has 37 people on a team that needs a tool, they buy 37 seats, deploy the software, pay the monthly bill, and get back to work, hopefully in a more efficient and profitable way.

Enter the current state of AI, where agents are tasked and deployed 24/7 to do the work a human would typically do sitting at a desk. Simple math says that if AI does not take time off and a regular workday is eight hours long, one agent could potentially do the work of three employees.

Now, the math:

If one agent replaces three people’s work, the company does not need three software subscriptions. It needs one. The per-seat model is inherently worth less.

• The company has a significant arbitrage opportunity: pay a few hundred dollars a month to run an agent instead of paying multiple full-time salaries, while keeping one staff member to orchestrate and oversee the agents.

• The “extra” humans now have to find new roles, new industries, or new skills.

• The software vendor’s revenue from that customer drops dramatically, and that compression flows through to their own financials and headcount.

This is not an exact blueprint, but it is close enough to explain what just happened in software: a massive repricing driven by investors gaming out what happens if this dynamic scales.

So that is the backdrop. What I care about for you is the implication. What does this mean for your career, your income, and your financial plan?

A few thoughts.

The physics of business are changing
The economics of software are being rewired in real time. Per-seat models are being questioned just as AI makes junior and even mid-level engineering and knowledge work dramatically more automated. Native AI companies are posting revenue per employee numbers that would have sounded impossible a decade ago, in some cases millions of dollars per employee. That changes how many people a business “needs” to hit a given revenue target.

We are seeing a barbell: new AI-native firms with extreme operating leverage on one side, and a long tail of legacy companies working to adapt on the other. Some AI companies are doing high single-digit millions in revenue per employee. I grew up thinking $350,000 in revenue per employee was strong performance. When that gap widens, the economic benefit concentrates. The owners of the most efficient platforms capture more of the economics, while the middle of the labor market absorbs more of the risk. Most of us live in that middle.

Career durability risk is rising
Most of what you have read over the years about investing and personal finance assumes a relatively smooth, upward career trajectory over decades. There may be a few layoffs and some bumps in the road, but generally a straight line. Certain categories of work can now be absorbed by agents and automation. The result is more uncertainty inside careers, not just in markets.

Your portfolio is likely diversified, but careers are inherently not, by design. You specialized to become harder to replace and to command high pay for your skill set. Over the next 12 months, assume at least one part of your role can be automated and proactively upskill in the direction of coordination, relationships, or judgment. If career durability becomes less predictable, the architecture of your financial life has to become more resilient: treat income volatility as a base case, not an exception—shorter recertification cycles, slightly higher emergency fund targets, and more frequent plan updates.

Expertise is now a commodity, but experience is not
Knowledge, the very thing white-collar workers are supposed to possess, is increasingly commoditized and lives in the vast data centers being built. Experience, relationships, and storytelling are not. If you read the first few chapters of Proverbs, you will see that knowledge, understanding, wisdom, and judgment are all spoken of highly and frequently. Knowledge is becoming free, but understanding, wisdom, and judgment will be the foundation as agents do the work you or your kids once did.

Knowledge is abundant. What you do with that knowledge—judgment, wisdom, and understanding—is the skill to cultivate. How you allocate capital, make decisions under uncertainty, and navigate transitions is what matters.

So where does this leave you?

First, do not confuse volatility with collapse.

Risk is not volatility. Markets reprice when the underlying economics change. Volatility is not a bug in the system. It is price discovery and signal. What you do in volatility matters. I had a conversation with a client yesterday as she navigated extreme volatility in her career field. It has been hard, long, and tiring. I told her that instead of assuming the bad times will simply drag on, what if this was the low point and things improve from here.

Second, zoom out from your portfolio and dial in to career risk.

Investing is relatively straightforward right now. Navigating careers and rapidly changing companies is the harder part. This is the key problem to solve: your investments may be diversified, but your career is a single, concentrated position. You don’t need to panic, but you do need to pay attention.

Third, lean into judgment, not just knowledge.

Do not be the person who treats AI as a toy and hopes it goes away. Be the person on your team who understands it well enough to help navigate through it. If you are working or have many years left in your career, treat this like the printing press or the industrial revolution. If AI turns out to be overbuilt and overhyped, you will still understand the most important technology of this century. If it turns out to be underbuilt and underhyped, you will be the one who can help others through it.

Fourth, relationships, relationships, relationships.

Here is what I am telling my team as the wealth management industry had its own moment two weeks ago when a new tool from Altruist was released, erasing billions from legacy players in the public wealth management platforms. Life, work, and business have always been about relationships. We want to use AI in our business to become more efficient in the areas where AI is better than humans, so we can focus on judgment and, more importantly, build stronger relationships with our clients given the amount of change we are currently experiencing and will continue to experience.

We are likely entering a period where the range of outcomes widens. Some businesses will become more efficient than anything we have seen before. Some roles will disappear. New roles will emerge, commanding high skill and strong compensation. Some people will build generational wealth, and some will find their field of work becomes obsolete. Most people will experience some version of both: more leverage where they are aligned with the new physics, and more pressure where they are not.

Is this all doom and gloom? Not even close. Work will change. Career and business strategy will change. This is innovation at scale.

We may look back in 15 years at how simple this period was. We may even long for parts of it. But we will not want to go back.

Here is the goal: don’t be complacent.

No one knows the exact outcome. But from everything I am reading, if you are working or have many years left in your career, you cannot afford to ignore this. Learn the tools, understand the economics, and take your career and financial planning seriously in light of these changes.

When the physics of work change, the architecture of your financial life has to adjust.

If you’d like to talk through how this applies to your own financial life, you can learn more about our work at Fjell Capital here.

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More next week.