The Coordination Layer - AI’s Emerging Economic Power Center

The economic power centre of AI is about to make its most significant transformation - and its not the absorbtion of SaaS application logic.

The recent $1 trillion repricing of software markets was rational.

As AI systems absorb logic that once lived inside SaaS applications — generating code, integrating APIs, simulating workflows — the scarcity that justified software multiples begins to compress. Markets recognized that.

What they have not yet fully repriced is what follows when execution becomes abundant.

When intelligence shifts from being scarce to being commoditized, value does not disappear. It migrates. Not sideways. Upstream. Toward the systems that interpret intent, coordinate supply, and allocate demand.

The natural objection is that this upstream layer will be owned by autonomous agents. It won’t — and the reason is structural.

What follows explains that migration — and where economic leverage concentrates next.

The implications are not academic.

The Three-Phase Migration

Value migration in AI does not occur all at once. It unfolds in stages as successive layers lose scarcity.

Phase One — Execution

For two decades, value concentrated in software execution. Users chose applications. Applications executed logic. Moats were built on the difficulty of building and maintaining that logic.

AI began compressing that friction. Code generation accelerated. Feature replication shortened. Infrastructure modularized.

Execution increasingly runs through shared AI models rather than application-specific logic. Scarcity weakened. That marked the first repricing.

Phase Two — Models

As execution logic commoditized, intelligence consolidated. What once lived inside individual applications migrated into shared model infrastructure. Foundation models absorbed reasoning, synthesis, and pattern recognition across industries.

But model providers compete on capability and cost. They are capital-intensive. They face inference price compression. They operate in an arms race.

Intelligence becomes abundant. Scarcity shifts again.

Phase Three — Coordination

When both execution and intelligence are abundant, the scarce function becomes deciding what gets done.

Execution shapes supply. Coordination shapes demand.

The coordination layer interprets intent, aggregates options, compresses comparisons, and routes execution. That routing function is economically decisive.

Within coordination, three control pressures emerge:
Authorization — who is permitted to act
Routing — where demand is directed
Flow — how transaction volume concentrates

These are the mechanisms through which coordination captures leverage. As execution commoditizes and models compress, economic power concentrates in the layer that authorizes action and routes demand.

Value does not disappear. It moves to the layer all transactions must pass through.

What Coordination Looks Like

Consider a loan application scenario.

Sarah needs to finance a small business expansion. In the old world, she searches: “Best small business loan.” She receives ranked links. Fills multiple forms. Uploads documents repeatedly. Waits for manual responses. Coordinates everything herself.

Now imagine the interaction shifting.

Sarah does not type keywords. She speaks.

“My name is Sarah, and I run a café in Austin that I started a little over five years ago. It’s an LLC, I own it outright, and we’ve been profitable for the last four years. Revenue’s roughly doubled over the past two, and we’ve never missed a payment on any business debt.

Our cash flow’s pretty steady — rent is locked in on a long‑term lease, payroll is stable with low staff turnover, and food costs have been manageable even with recent inflation. I keep around three months of expenses in savings and, apart from a small equipment lease that’s current, we don’t have other business loans.

I’ve found a second site about ten minutes away in a busy neighborhood that looks a lot like where we are now. I need 250,000 dollars to cover the build‑out, equipment, initial inventory, and some marketing. I’m putting in 80,000 dollars of my own cash and can use new equipment as collateral. I also own a condo with solid equity if that helps structure the deal.

Ideally, I’d like a seven‑ to ten‑year term, maybe with six to twelve months interest‑only while the new location ramps, and I’m fine giving a personal guarantee. I’d like to keep monthly payments under 6,000 dollars so we can handle seasonal swings, and I’d prefer to avoid covenants that would block me from hiring or opening a third location if things go well.

My credit score is in the high 700s, I’ve never declared bankruptcy, and I’ve banked in the same place since we opened. What I’m really looking for is a lender that understands small hospitality businesses, can move reasonably quickly once I sign the lease, and wants a long‑term relationship rather than just a one‑off loan.”

This is not a query. It is compressed identity and intent.

As voice interfaces mature, high-dimensional intent becomes conversational. Speech carries context that text suppresses — tone, pacing, hesitation, urgency. In regulated financial products, risk posture, time horizon, and stress level materially affect optimal fit. Coordination systems that ingest this signal operate with richer interpretive bandwidth than keyword-driven systems ever could.

The coordination layer ingests this context once. Then it:

• Evaluates credit and risk fit across lenders
• Matches product structures to cash‑flow constraints
• Compares approval likelihood and time‑to‑funding
• Ranks institutional fit and pricing
• Presents a small set of pre‑qualified options with a recommendation

Sarah does not compare 20 websites or chase email threads. She delegates judgment to the coordination environment.

The shift is structural:

From retrieval to interpretation.
From assistance to delegation.
From search to demand allocation.

The same compression dynamic applies across healthcare diagnostics, legal services, financial advisory, travel coordination, and any industry where complex intent has to be executed inside structured, rule-bound systems.

Industry Collapse Modeling — Small Business Lending

Small business lending illustrates the structural shift clearly.

Today’s model — a fragmented distribution stack:

Bank branches and relationship managers
Online loan marketplaces and comparison sites
Independent brokers and alternative lenders
Repeated data capture at every step
High acquisition cost for both sides of the market

Coordination collapses that stack.

Persistent identity and rich operating data improve credit selection and pricing accuracy.
Pre‑qualified, context‑rich intent lowers acquisition cost.
API‑integrated origination and underwriting remove manual friction and abandonment.

The coordination layer does not refer traffic. It integrates.

Once a lender is selected, identity, financials, and collateral information flow directly into origination and core banking systems via API. Applications are pre‑populated, documents are requested programmatically, risk models run automatically, and decisions compress from weeks to minutes.

This is not lead generation.

It is programmable demand infrastructure delivering pre‑underwritten, transaction‑ready borrowers into a controlled environment.

Lenders integrate — or lose distribution.

Revenue shifts from product‑level pricing power to control of the surfaces where qualified demand appears.
Context compounds over time. Identity and performance data deepen with each interaction.

Compounding context becomes economic leverage.

A Natural Objection

Incumbent carriers may resist integration. Brand recognition feels defensible. Existing broker networks feel sufficient.

But distribution gravity does not ask permission.

If consumers begin delegating insurance decisions to AI coordination environments, the dominant question becomes:

Which carrier is integrated into the interface where delegated intent flows?

Refusal does not preserve independence. It increases customer acquisition cost.

Early integrators benefit from compounding conversion feedback. Late participants compete inside a system they did not define.

Why Agents Won’t Roam

Agents will not transact across the open web. They will operate inside permissioned, identity-aware coordination environments where liability, payment authority, and compliance can be enforced.

Each vertical requires:

• Pre-integrated API rails
• Standardized data schemas
• Compliance guardrails
• Liability mapping

Agents will route to the environments where this work has already been done:

• The most trusted.
• The most deeply integrated.
• The most complete.

In an agent economy, demand does not fragment. It concentrates.

Coordination becomes the default transaction surface.

The Trust Boundary

Execution without permission is unusable. Intelligence without identity, payment authority, credential access, and liability context cannot transact.

Authorization is the trust boundary of the AI economy. Coordination layers sit at that boundary.

Control at this layer resembles regulated infrastructure more than application software.

Trust depends on durable identity resolution. The routing surface may evolve. The namespace layer persists.

Namespace Gravity

Intent is expressed once. The destination is invoked directly. The transaction begins immediately.

When there is no navigation, the entry point becomes the scarce asset.

Software logic is infinite. Linguistic real estate is finite.

The Asymmetry

No structural thesis is riskless. Terminology may evolve. Interfaces may shift.

But the asymmetry is structural.

As model competition intensifies, token prices compress. The coordination layer benefits from that compression. The model layer absorbs it.

That asymmetry is structural.

If coordination layers become the dominant transaction interface, the namespace through which intent is expressed becomes a leverage point.

For capital allocators, this is convex optionality. For incumbents, it is preemption.

Where the Leverage Accumulates

Execution shapes supply. Coordination shapes demand.

The February repricing addressed execution. The next repricing will define coordination.

Early control of the entry point determines long-term distribution economics. Some actors have already begun treating coordination-layer assets as infrastructure rather than marketing collateral.

The Vibe Domains portfolio is one such example: not a feature, not a standalone product, but a pre-assembled namespace positioned at the coordination and authorization layer of the AI economy.

It functions as an early claim on the linguistic real estate through which expressive intent may be routed.
Held as a single acquisition unit, it represents a position that would be difficult to re-create piecemeal via open-market purchases, even if individual components remain technically available.

More broadly, the coordination layer will not be owned by everyone.

In each regulated industry, a small number of environments will become the default entry point through which high-intent transactions are initiated.

Once that position is established:

• Demand flows there by default
• Customer acquisition cost structurally resets
• Competing providers operate inside a system they do not control.

This is not a winner-takes-all dynamic at the application layer. It is a control-point dynamic at the demand layer.

The question for incumbents and capital allocators is not whether this transition occurs, but whether they participate in defining the entry point — or integrate into an environment defined by someone else.