The Shift from Build vs. Buy: AI's Impact on Software Development Decisions

The traditional dilemma for companies has long been whether to build software solutions in-house or purchase them from vendors. Historically, the decision leaned towards building when the software was core to the business and buying when it was not. However, advancements in artificial intelligence (AI) have fundamentally altered this framework. AI has made software development more accessible, allowing non-technical employees to create functional tools quickly and efficiently, thereby challenging the established norms of the build versus buy debate.

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AI tools now enable employees without coding expertise to develop solutions that previously required extensive engineering resources. For instance, a customer experience team member can address a minor bug by using AI to generate a fix in a matter of minutes, rather than initiating a lengthy support ticket process. This shift allows teams to solve problems directly, reducing the dependency on engineering teams and accelerating the implementation of solutions.

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The traditional sequence of defining needs, deciding to build or buy, and then implementing a solution is being reversed. Companies can now create lightweight prototypes using AI to clarify their actual needs before making purchasing decisions. This approach allows organizations to conduct controlled experiments, determining which features are genuinely valuable and which are merely attractive in vendor presentations. Consequently, when it comes time to buy, companies can evaluate whether a vendor's solution is superior to what they have already built.

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Despite the potential benefits, there is a risk that companies may rush to adopt AI tools without fully understanding their implications. Many organizations are filling their technology stacks with AI-powered products based solely on marketing claims, rather than assessing whether these tools will enhance their operations. This phenomenon mirrors the concept of "cargo cult science," where companies mimic the appearance of AI integration without realizing the underlying functionality is lacking.

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Siqi Chen, co-founder and CEO of Runway, emphasizes that the shift towards AI-driven development is not a distant future but a current reality. Companies that embrace this change will gain a deeper understanding of their operations, leading to smarter spending and fewer costly mistakes. Conversely, those adhering to outdated practices may find themselves outpaced by competitors who leverage AI effectively.

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• “The companies that embrace this shift will move faster and spend smarter.” — Siqi Chen, Co-founder and CEO of Runway

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• “Now, it’s more elegant and way smarter: Build to learn what to buy.” — Siqi Chen, Co-founder and CEO of Runway

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• “They’ve built the airstrip, but the planes aren’t showing up.” — Siqi Chen, Co-founder and CEO of Runway

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• “You can test things, and you can actually learn something before you spend.” — Siqi Chen, Co-founder and CEO of Runway

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As AI continues to evolve, the distinction between technical and non-technical roles is becoming increasingly blurred. Companies that adapt to this new reality will not only enhance their operational efficiency but also make more informed purchasing decisions. The shift from a binary build versus buy mentality to a more nuanced approach of building to learn will define the future of software development in the enterprise landscape.

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