Many commenters say that AI is overblown and they're right. But the rise in labor precarity in almost all sectors is real.
If the effect size isn't attributable to AI, then it must be the case that we have been in an unacknowledged recession for over a year.
How do you jump from “not attributable to AI“ to “must be a recession”? I think it would be true for jobs that are not separable from companies economic activity, but it isn’t true for a good portion of tech jobs. A car manufacturer can’t sell the same amount of cars while reducing a half of assembly workers, but most tech giants can maintain profitable parts of their business with a fraction of their workforce (if not indefinitely then at least for some time). Some work can be eliminated altogether, some might be outsourced to other countries, some split among existing workers. I think that’s what’s happening.
Why it is happening, though? Hard to say for sure, but I don’t see why it couldn’t be a combination of tighter availability of capital, shrinking addressable market (due to deglobalization & demographics) and AI competition requiring huge capex
The future is not that AI takes over. It's when the accountants realize for a $120K a year developer, if it makes them even 20% more efficient (doubt that), you have a ceiling of $2000/mo. on AI spend before you break even. Once the VC subsidies end, it could easily cost that much. When that happens... who cares if you use AI? Some developers might use it, others might not, it doesn't matter anymore.
This is also assuming Anthropic or OpenAI don't lose any of their ongoing lawsuits, and aren't forced to raise prices to cover settlement fees. For example, Anthropic is currently in the clear on the fair use "transformative" argument; but they are in hot water over the book piracy from LibGen (illegal regardless of use case). The worst case scenario in that lawsuit, although unlikely, is $150,000 per violation * 5 million books = $750B in damages.
Source? Dario claims API inference is already “fairly profitable”. They have been optimizing models and inference, while keeping prices fairly high.
> dario recently told alex kantrowitz the quiet part out loud: "we make improvements all the time that make the models, like, 50% more efficient than they are before. we are just the beginning of optimizing inference... for every dollar the model makes, it costs a certain amount. that is actually already fairly profitable."
https://ethanding.substack.com/p/openai-burns-the-boats