AI will compress the middle of every market
Average work gets cheaper first. The edges—trusted commodity and exceptional craft—become more valuable.
Automation rarely removes a market evenly. It attacks the middle: work that is expensive enough to optimise but standard enough to describe. AI is accelerating that pressure across knowledge industries.
The shift
The surface-level story is speed: more output, shorter cycles, lower production cost. The structural story is that the location of scarcity moves. Once an old constraint becomes cheap, the system reorganises around what is still difficult to obtain—context, judgement, authority, attention or trust.
That distinction matters because markets routinely overvalue the newly abundant thing during a transition. Capability is visible. Integration is quiet. Yet integration is where a possibility becomes a repeated behaviour and, eventually, an institution.
Where the leverage moves
Companies need to choose an edge. One is radical efficiency with predictable quality. The other is judgement, trust and an experience that cannot be flattened into a specification.
The practical response is not to chase every new capability. It is to identify which part of the value chain now moves faster, which part becomes newly defensible, and what kind of product can make that shift legible to a user. A good product is a theory of the new constraint made concrete.
The model to hold: capability diffuses; situated judgement compounds.
What I’m watching
Margins in undifferentiated service layers will reveal the shift first. The strategic mistake is defending yesterday’s average with tomorrow’s tools.
The most useful signals will not always arrive as announcements. They appear in changed pricing units, shrinking interfaces, new permission patterns and teams achieving outcomes that their organisational shape should not permit. Those are the moments when the future stops being a claim and starts becoming an operating fact.