AI May Disrupt Software, But Networks Are The Real Moat

Will AI destroy the software industry? This post explores why service models and network effects may be the real moats protecting enterprise software.

Mar 03, 2026

Will AI disrupt the software industry — maybe even destroy it?

That question has been rattling investors over the past few weeks. Consider the panic that followed when little-known Algorhythm issued a press release that sent the stock prices of C.H. Robinson, Landstar System, Ryder, J.B. Hunt, and other logistics providers tumbling.

The fear is simple: If AI can generate code at near-zero cost, what happens to companies built on selling software?

There is a related discussion going on too about whether companies will “vibe code” their own applications instead of buying solutions from established vendors. I chimed in on this topic recently in “Should You Really Vibe Code A TMS?”

Not surprising, the software industry is going on defense and challenging this narrative.

Digital Twins in Supply Chain Operations

PepsiCo announced an industry-first collaboration with Siemens and NVIDIA to apply AI-enabled digital twin technology across manufacturing and supply chain operations. The initiative is focused on simulating, optimizing, and validating production and logistics decisions before making physical or capital changes. Against this backdrop, this survey explored how supply chain and logistics executives are viewing the strategic importance, readiness, and potential value of AI-enabled digital twins within their own organizations.

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