The Coasean Singularity: AGI Could Spawn Both Tiny Firms and Giants at Once
Anen-o-me · reddit · 2026-10-09
A Reddit essay applies Coase's theory of the firm to AGI, arguing for two simultaneous effects:
- AGI makes enormous firms easier to manage: maximum manageable scale could grow from 50,000 employees to "5,000 humans + millions of AI agents."
- AGI makes large firms less necessary: a personal AI could coordinate 30 independent companies and 200 autonomous services, shrinking minimum viable scale from 50 people to "3 humans + AI."
The predicted result is a barbell-shaped redistribution of firm size — far more tiny firms and far more powerful giants — with entrepreneurial entry barriers collapsing. The author estimates income for a 200-person AI-augmented company doing a 5,000-person company's work could rise from $100k to $2.5M per person on average, amplified further by potential 90% price deflation boosting real purchasing power.
More from AGI Musings
- AI Math Breakthroughs Explode: From 10 in August to 722+ in October — Dr_Singularity · 2026-10-09
- AI video's new market: short-shelf-life viral clips, not feature films — bendee983 · 2026-10-09
- Fake Costs Are Collapsing: Authenticity Now Needs Verification, Not Recognition — r0ck3t23 · 2026-10-09
- "All interesting frontier AI work now happens in closed circles" — fkasummer · 2026-10-09
- Addy Osmani: Agents Erode Engineers' Joy of Knowing — If You Only Pick, Never Conjure — addyosmani · 2026-10-09
- Terence Tao hosts guest post on what math students should do in the LLM era — keviv9 · 2026-10-09