David Klotz

Max Boettinger, David Klotz

In the realm of circuit motorsports, race strategy plays a pivotal role in determining race outcomes. This strategy focuses on the timing of pit stops, which are necessary due to fuel consumption and tire performance degradation. The objective of race strategy is to balance the advantages of pit stops, such as tire replacement and refueling, with the time loss incurred in the pit lane. Current race simulations, used to estimate the best possible race strategy, vary in granularity, modeling of probabilistic events, and require manual input for in-laps. This paper addresses these limitations by developing a novel simulation model tailored to GT racing and leveraging artificial intelligence to automate strategic decisions. By integrating the simulation with OpenAI's Gym framework, a reinforcement learning environment is created and an agent is trained. The study evaluates various hyperparameter configurations, observation spaces, and reward functions, drawing upon historical timing data from the 2020 Nürburgring Langstrecken Serie for empirical parameter validation. The results demonstrate the potential of reinforcement learning for improving race strategy decision-making, as the trained agent makes sensible decisions regarding pit stop timing and refueling amounts. Key parameters, such as learning rate, decay rate and the number of episodes, are identified as crucial factors, while the combination of fuel mass and current race position proves most effective for policy development. The paper contributes to the broader application of reinforcement learning in race simulations and unlocks the potential for race strategy optimization beyond FIA Formula~1, specifically in the GT racing domain.

David Klotz

Advances in generative artificial intelligence, particularly agentic coding systems capable of autonomous software development, are disrupting the economics of the make-or-buy decision for enterprise applications. The "SaaSocalypse" narrative predicts that AI will render large segments of the Software-as-a-Service market obsolete by enabling firms to build software in-house at a fraction of historical cost. This paper adopts a conceptual research approach, combining transaction cost economics and the resource-based view with an assessment of current AI capabilities, to systematically re-evaluate the factors underlying the make-or-buy decision. It makes three contributions. First, it provides a factor-level analysis of how AI reshapes seven canonical decision determinants: cost, strategic differentiation, asset specificity, vendor lock-in, time-to-market, quality and compliance, and organizational capability. Second, it develops a typology of enterprise applications by their sensitivity to AI-induced shifts in make-or-buy economics. Third, it demonstrates that AI fundamentally transforms the governance properties of the Make option, shifting it from Williamson's pure hierarchy to a hybrid governance form that combines code ownership with external AI infrastructure dependency, with qualitatively different economics, capability requirements, and governance structures than pre-AI in-house development. The analysis finds that the SaaSocalypse thesis is overstated for most enterprise application categories; Make is most compelling for commodity utilities and differentiating custom applications in the AI era, while regulated and mission-critical systems remain predominantly in the buy domain.