Akhund: AI labor-replacement software margins will collapse under market competition
Immad Akhund · 20VC Exclusive: Mercury Founder Launches First $26M Fund with Immad Akhund · 20VC with Harry Stebbings · May 12, 2025 · at 24:35
Immad Akhund is the CEO of Mercury and an active startup investor. He discusses why he is skeptical of current AI pricing models that promise to replace human labor.
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“So yeah, the sell that like VCs get and entrepreneurs are making is, oh, we're replacing your labor costs. Therefore, we should charge a third of that. But the reality is, once you have a competitive market dynamic, like, the actual margins are going to compress massively, and we'll end up on, like, a 10th, or maybe even a 20th of the labor cost as, like, actual eventual revenue.”
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