An A16z partner says Silicon Valley’s fears of an AI 'permanent underclass’ is a ‘dark fantasy’

An Andreessen Horowitz partner isn’t afraid that AI will create a “permanent underclass,” and gave a reason why you shouldn’t be, either.

In an episode of Lenny’s Podcast, released on Sunday, host Lenny Rachitsky asked Andreessen Horowitz partner Anish Acharya what he thought about the meme phrase “permanent underclass.” The phrase, which refers to people who will fall behind if they don’t work at frontier AI labs like OpenAI or Anthropic, or use the latest AI tools to advance their careers, has been a contentious point of discussion on X.

Acharya called the phrase a “funny dark fantasy” that shouldn’t be taken seriously.

This was because this new era of tech, with AI, is a lot less centralized than previous tech booms, he said. “Things have never been better, really, by almost every measure,” Acharya said. “By how sort of distributed all the opportunities are, by the kind of technology we have access to, to the types of ambition we’re allowed to have, and to the number of companies that are sort of independently working on things that are winning.” He said there are about 20 relevant players across every layer of the AI tech stack, not just two.

Coding agents, once seen as a “winner takes all” market, now include successful tools like Claude Code, Codex, Lovable, Replit, and Wabi, a development he called “really encouraging.” He added that even outside tech and AI, for jobs like radiology, job listings are holding strong — so he doesn’t see much evidence for there being a “permanent underclass.” Before joining Andreessen Horowitz, Acharya held leadership positions in Credit Karma and Google.

Acharya’s comments fall in line with what other tech pundits have said about the “permanent underclass.” OpenAI CEO Sam Altman said in a July interview that the idea was “so dumb.” But in the heart of the AI boom, San Francisco residents are feeling at least one effect — skyrocketing housing costs.

As AI employees with hefty pay packages move into San Francisco, rent and mortgage prices have shot up in the city where housing is already in short supply.