From: allin
Implications of AI on Traditional Tech Jobs and Growth
Artificial intelligence is rapidly transforming the job market, particularly within the tech sector, leading to significant shifts in traditional roles and business growth models. While some express concern about job displacement, others foresee a fundamental redefinition of work and an increase in overall productivity and new opportunities.
AI’s Impact on Tech Employment
The tech industry has recently experienced a downturn in traditional job growth. Developer jobs, for instance, were down more than 30% since February 2020 [01:13:15]. Over half a million tech jobs have been eliminated since 2022 [01:09:27], with entry-level tech workers, especially recent college graduates, being hit the hardest [01:13:35].
However, the consensus among some industry leaders is that widespread job loss might be “overdone,” with disruption being a more accurate term [01:13:04]. Coders, for example, are now 10-30% more productive due to AI coding assistant tools, yet the demand for software remains unlimited, and the need for coders persists [01:13:12].
"I just think that this is so overdone there's going to be a lot of disruption in the knowledge worker space like we talked about the workflow at call centers and to service factories there's going to be a lot of change but at the end of the day I think there's going to be plenty of work for humans to do." [01:13:38]
Transformation of Knowledge Work
The emergence of advanced AI models like OpenAI’s 01 is fundamentally changing how knowledge work is performed [00:22:59]. This model, which utilizes a “Chain of Thought” approach by asking itself how to answer a question and then breaking down the steps [00:18:25], is seen as a “game changer” [00:17:08].
This capability implies that traditional analytical roles may diminish, as AI can perform data analysis that would typically take human analysts days, within minutes [00:22:28]. The shift is towards “agents” – AI systems that can be given an objective, break it down into tasks, and then execute those tasks [00:20:20]. This could redefine business operations in fields like call centers and customer support, which operate like “service factories” with assembly lines of people doing knowledge work [00:21:11].
Impact on Business Models and Growth
AI is expected to lead to significant changes in business structure and growth:
- Increased Leverage and Efficiency: Companies will gain more leverage from using software and fewer people, leading to a change in the “economic size of companies” [00:28:00]. Revenue per employee is already increasing significantly, with major tech companies doubling their revenue per employee in two to three years while maintaining or reducing team sizes [00:40:03].
- Disruption of “Systems of Record”: Traditional “systems of record” (e.g., Salesforce for CRM, Oracle/Workday for GL), which are single sources of truth for company data, may lose their centralized grip [00:27:31]. The argument is that raw data piped directly to a data warehouse can be managed by AI agents, making expensive, clunky, third-party software less necessary [00:25:08].
- New Pricing Models for Software: The traditional “per-seat” pricing model for software is being challenged by consumption-based pricing, where companies pay based on actual usage (e.g., number of sales calls analyzed), reflecting the leverage provided by AI agents [00:35:05].
- Deflationary Pressure on Costs: The significant reduction in price per token from both open-source and closed-source AI models is creating massive deflationary pressure, making AI-powered solutions orders of magnitude cheaper than what they replace [00:38:11].
Beyond just disruption, there is a "net new opportunity" for AI companies, whether startups or existing large companies, as AI creates new use cases and expands the overall market pie [00:36:02].
The Rise of the “Tool Belt Generation”
In parallel with shifts in tech jobs, there’s a notable trend among younger generations towards vocational skills and trades. A poll of 1,000 teens found that about half believe a high school degree, trade program, or two-year degree best meets their career needs [01:13:11], and 56% value real-world, on-the-job experience over a college degree [01:10:20]. This shift is seen as a positive development that challenges the “stranglehold” of the university education system [01:10:46], which has led many into significant debt for degrees that may not guarantee economic stability [01:11:00].
This trend also coincides with an “emerging premium for Human Service” [01:17:31]. As AI automates many tasks, the human touch in services, such as electricians, plumbers, fitness instructors, and personal tutors, will command higher demand and salaries [01:17:40]. This suggests that while AI’s impact on various industries will be significant, it may also foster growth in fields that emphasize human interaction and craftsmanship.