Alright, if this is more palatable - let's just say market caps will decline because of small code updates made anywhere in the world.

The point still is: Software/engineering is no longer the moat creator.

You completely misunderstood the reason for the stock price drop. It was because of the DeepSeek MoE model's compute efficiency which vastly reduced the compute requirements needed to achieve a certain level of performance.

Notice how Apple and Meta stocks went up last 2 days?

You are misunderstanding my point. It is because anyone with a non-software moat will likely be able to leverage the benefits of AI.

Apple has a non-software moat: Their devices.

Meta has a non-software moat: their sticky users.

So does Microsoft, and Google to an extent with their non-software moat.

But how did they build the most in the first place? With software that only they could develop, at a pace that only they could execute, all because of the people they could hoard.

The companies of the future can disrupt all of them (maybe not apple) very quickly by just developing the same things as say Meta and "at the same quality" but for cheaper. The engineers moat is gone. The only moat meta has is network effects. That's one less barrier for a competing company to deal with.