From: allin
The tech industry is currently experiencing significant shifts in employment, particularly concerning software developer jobs. While some attribute this to the rise of artificial intelligence, experts suggest broader economic factors are primarily at play [00:39:34].
Decline in Software Developer Job Postings
Data from Indeed shows a dramatic 80% decrease in software developer job postings, falling below pre-2020 (pre-COVID) levels [00:37:10]. This represents a significant contraction in demand for these high-paying, elite jobs [00:37:33].
Attributed Causes
The decline is largely attributed to:
- Shift in Company Formation: The end of the “zero interest rate policy” era has changed how companies are formed, leading to a contraction in Software as a Service (SaaS) businesses and a lack of material increase in new SaaS startups [00:37:50].
- Big Tech Layoffs: Major tech companies underwent significant layoffs as they focused on re-establishing profitability [00:38:12].
- Economic Weakness: Rapid interest rate hikes (from nearly 0% to 5.5% in one year) have sucked liquidity out of the economy, contracting economic activity and creating pressure for companies to be profitable [00:39:44]. This has led to a reduction in job postings, burning off a large backlog of open jobs [00:40:39].
Current and Future Impact of AI on Job Markets
Currently, experts believe it is “too soon” for AI to be the primary cause of job elimination or replacement [00:39:34].
- Productivity Lift: Present AI tools are seen as providing a 10-15% productivity lift to individuals in traditional organizations, rather than creating “10x engineers” [00:38:27].
- Future Potential: While it hasn’t happened yet, there’s an expectation that future companies, started from scratch using advanced AI tools, could achieve a significant level of productivity with a tenth of the workforce [00:38:44].
- Rising Model Costs: The cost of building a functional foundational AI model is projected to increase dramatically, from billions today to potentially a hundred billion dollars by 2027 [01:00:01]. This “arms race on cost and compute” means only a few large companies (e.g., Google, Microsoft, Facebook, Amazon, OpenAI) might be able to afford the necessary investment [01:00:19]. This could make it difficult for new startups to compete effectively in the foundational model market [01:00:55].
- Application-Specific Models: Smaller, highly functional, and application-specific AI models are increasingly being used in local environments (at the edge), rather than requiring large compute clouds [01:01:34]. These find powerful applications in areas like machine vision and control systems [01:02:02].
Observations from Venture Capitalists
The hiring landscape has significantly changed, with venture capitalists noting that hiring software developers is “much easier” now compared to two years ago [00:41:48]. Startups are finding it the “best time possible” to hire great talent because large tech companies are no longer issuing multiple competing offers (e.g., from Google, Apple, Amazon) that previously inflated compensation packages [00:42:00]. This absence of high-end offers allows startups to attract top talent [00:42:37].
“The talent on the field is incredible.” [00:42:42]
OpenAI’s Potential IPO and Corporate Strategy
OpenAI is reportedly considering a conversion to a for-profit benefit corporation, potentially leading to an IPO. This move would provide capital markets distribution by syndicating ownership to large institutional investors (e.g., BlackRock, mutual funds), aligning their interests with OpenAI’s corporate objectives [00:43:41].
Chamath Palihapitiya suggests that early leaders in a new technological shift should monetize their success quickly, as the long-term winners are often different from the initial leaders [00:43:53]. David Sacks advocates for OpenAI to adopt a standard C Corp structure, make things right with early investors like Elon Musk, and provide Sam Altman with a CEO compensation package to prepare for a public offering that allows the public to invest in the AI wave [00:45:51].
Ilya Sutskever, former OpenAI co-founder, has launched a new startup called Safe Superintelligence Inc. (SSI) with the goal of developing “safe superintelligence” [00:54:53]. However, this approach is viewed skeptically, as focusing on “safety concerns” could act as a “brake pedal” that slows down development in a competitive race to advance AI [00:56:19]. There’s a concern that companies prioritizing safety might lose out in this “darwinian effect” [00:57:46].# Tech Unemployment and Effects of AI on Tech Jobs
The tech industry is currently experiencing significant shifts in employment, particularly concerning software developer jobs. While some attribute this to the rise of artificial intelligence, experts suggest broader economic factors are primarily at play [00:39:34].
Decline in Software Developer Job Postings
Data from Indeed shows a dramatic 80% decrease in software developer job postings, falling below pre-2020 (pre-COVID) levels [00:37:10]. This represents a significant contraction in demand for these high-paying, elite jobs [00:37:33].
Attributed Causes
The decline is largely attributed to:
- Shift in Company Formation: The end of the “zero interest rate policy” era has changed how companies are formed, leading to a contraction in Software as a Service (SaaS) businesses and a lack of material increase in new SaaS startups [00:37:50].
- Big Tech Layoffs: Major tech companies underwent significant layoffs as they focused on re-establishing profitability [00:38:12].
- Economic Weakness: Rapid interest rate hikes (from nearly 0% to 5.5% in one year) have sucked liquidity out of the economy, contracting economic activity and creating pressure for companies to be profitable [00:39:44]. This has led to a reduction in job postings, burning off a large backlog of open jobs [00:40:39].
Current and Future Impact of AI on Job Markets
Currently, experts believe it is “too soon” for AI to be the primary cause of job elimination or replacement [00:39:34].
- Productivity Lift: Present AI tools are seen as providing a 10-15% productivity lift to individuals in traditional organizations, rather than creating “10x engineers” [00:38:27].
- Future Potential: While it hasn’t happened yet, there’s an expectation that future companies, started from scratch using advanced AI tools, could achieve a significant level of productivity with a tenth of the workforce [00:38:44].
- Rising Model Costs: The cost of building a functional foundational AI model is projected to increase dramatically, from billions today to potentially a hundred billion dollars by 2027 [01:00:01]. This “arms race on cost and compute” means only a few large companies (e.g., Google, Microsoft, Facebook, Amazon, OpenAI) might be able to afford the necessary investment [01:00:19]. This could make it difficult for new startups to compete effectively in the foundational model market [01:00:55].
- Application-Specific Models: Smaller, highly functional, and application-specific AI models are increasingly being used in local environments (at the edge), rather than requiring large compute clouds [01:01:34]. These find powerful applications in areas like machine vision and control systems [01:02:02].
Observations from Venture Capitalists
The hiring landscape has significantly changed, with venture capitalists noting that hiring software developers is “much easier” now compared to two years ago [00:41:48]. Startups are finding it the “best time possible” to hire great talent because large tech companies are no longer issuing multiple competing offers (e.g., from Google, Apple, Amazon) that previously inflated compensation packages [00:42:00]. This absence of high-end offers allows startups to attract top talent [00:42:37].
“The talent on the field is incredible.” [00:42:42]
OpenAI’s Potential IPO and Corporate Strategy
OpenAI is reportedly considering a conversion to a for-profit benefit corporation, potentially leading to an IPO. This move would provide capital markets distribution by syndicating ownership to large institutional investors (e.g., BlackRock, mutual funds), aligning their interests with OpenAI’s corporate objectives [00:43:41].
Chamath Palihapitiya suggests that early leaders in a new technological shift should monetize their success quickly, as the long-term winners are often different from the initial leaders [00:43:53]. David Sacks advocates for OpenAI to adopt a standard C Corp structure, make things right with early investors like Elon Musk, and provide Sam Altman with a CEO compensation package to prepare for a public offering that allows the public to invest in the AI wave [00:45:51].
Ilya Sutskever, former OpenAI co-founder, has launched a new startup called Safe Superintelligence Inc. (SSI) with the goal of developing “safe superintelligence” [00:54:53]. However, this approach is viewed skeptically, as focusing on “safety concerns” could act as a “brake pedal” that slows down development in a competitive race to advance AI [00:56:19]. There’s a concern that companies prioritizing safety might lose out in this “darwinian effect” [00:57:46].