Lenny RachitskyHost of Lenny's Podcast | Author of Lenny's Newsletter

The Permanent Underclass Is a Fantasy

7 Sept 2026 · 1 min

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Lenny Rachitsky and a tech expert discuss whether AI will create a permanent underclass. The coding-agent market, once feared as a winner-take-all space, now has a dozen active competitors instead of one dominant player. The recursive self-improvement that would lock in advantage hasn't materialized.

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I want to talk about this meme of the permanent underclass. How real of a concern do you think this really is? How seriously do you think people should take this?
It feels like there's a real fear from researchers at foundation model labs all the way through to the Silicon Valley layman. If you look at what's happening now, every part of the stack, there's not even 2 relevant players. There's like 20. If you look at coding agents, your mental model for 2 years ago should have been, would have been, I think, winner take all. And yet Claude Code, Codex, Lovable, Replit, Wabi, like they're all sort of working. If you ask the most sophisticated individuals at the labs, it's not actually RSI that's occurring, which could lead to some sort of runaway winner because they were an epsilon ahead of the others. It's autocatalytic effects, which just means you're using the new technology to improve your process, but it's not truly recursive. So I think everything from the most empirical to the most technical view points in the other direction. And yet we can't seem to let go of this fantasy.