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Tech companies are firing everyone to "fund AI", spending money on each other

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Re: Tech companies are firing everyone to "fund AI", spending money on each other

#21

Post by firefoxd »

Most companies using AI are just paying for a subscription. They aren't actually building LLMs or other machine learning applications that take over a known task. You could easily replace the term AI with just subscription.

When they say they are laying off workers, they are saying "we signed up for Cursor, and enabled some AI features on Jira and Salesforce"

The layoff is just an excuse until they realize that just because Jira can write a summary of the ticket, doesn't mean the ticket gets done any faster.

Re: Tech companies are firing everyone to "fund AI", spending money on each other

#22

Post by CharlieDigital »

I rarely post comments on LinkedIn, but I saw some of the dumbest content today and felt compelled to leave a response:

    > Just met a founder who fired his entire team because he was able to individually beat their entire productivity with Claude Code
My only thought when I read this is that this absolutely embarrassing...for founder who wasted dozens of hours recruiting, qualifiying, interviewing, onboarding, and training these resources. Then paying their salaries for who knows how long!

It just came across as some of the most small-brain thinking that anyone would then "Like" this content and not see it for what it is: idiotic management and leadership and just complete lack of basic foresight.

Why are you hiring absolutely replaceable people in the first place?

Re: Tech companies are firing everyone to "fund AI", spending money on each other

#23

Post by verzali »

simonw wrote: post #19
lateforwork wrote: post #15

The "spending money on each other" part is untrue. It is mostly going in one direction, towards Nvidia, and that's the reason they crossed $5 Trillion in market cap recently.

I found John Gruber's roundup of tech company profits (not revenue) interesting: https://daringfireball.net/linked/2025/10/30/apple-q4-result... - Google (a.k.a. Alphabet): $35B - Microsoft: $27.7B - Apple: $27.5B - Nvidia: $26.4B - Amazon: $21.5B

Is it a coincidence that 3 of 5 are so close?

Re: Tech companies are firing everyone to "fund AI", spending money on each other

#24

Post by shermantanktop »

alephnerd wrote: post #11

Doesn't pass the smell test as someone who has been on boards that made these decisions. This would be like saying cloud spend was circular because F1000 tech companies represent the majority of cloud spend from a revenue perspective, but tend to sell or partner with those same organizations. For example, AWS and Zscaler, or GCP and Broadcom. Reality is, a lot of product lines were formed or overhired with little-to-…

Agree with a lot of this. But on the last point, that’s the “blame middle management” theory. And I have seen outrageous, florid displays of exactly that behavior in those ranks.

But the CEOs have been there all along, doing the math on ZIRP and getting caught up in FOMO. They could have tightened their belts at any time, or demanded better justifications for investments. Why didn’t they?

Re: Tech companies are firing everyone to "fund AI", spending money on each other

#25

Post by testdelacc1 »

cjonas wrote: post #20
lateforwork wrote: post #15

The "spending money on each other" part is untrue. It is mostly going in one direction, towards Nvidia, and that's the reason they crossed $5 Trillion in market cap recently.

Then Nvidia is turning around and investing back in the AI companies so they can in turn buy Nvidia chips...

At least investing in companies that will buy Nvidia makes sense somewhat, even if it feels dodgy. What possible sense does it make for Nvidia to invest in a maker of telecom equipment (Nokia) with no public plan, and the value of the investment jumps 30% as soon as it’s announced? It’s not like call routing needs to be “AI enabled” or they’re putting Nvidia GPUs in their custom silicon.

Feels like Nvidia has too much money and they know whatever they invest in will appreciate thanks to the “AI premium” that investors bestow.

Re: Tech companies are firing everyone to "fund AI", spending money on each other

#27

Post by jvanderbot »

CharlieDigital wrote: post #22

I rarely post comments on LinkedIn, but I saw some of the dumbest content today and felt compelled to leave a response: > Just met a founder who fired his entire team because he was able to individually beat their entire productivity with Claude Code My only thought when I read this is that this absolutely embarrassing...for founder who wasted dozens of hours recruiting, qualifiying, interviewing, onboarding, and tra…

Best part: now the ceo can't hire because he's too busy building and debugging agents

Re: Tech companies are firing everyone to "fund AI", spending money on each other

#28

Post by gradientsrneat »

lateforwork wrote: post #15

The "spending money on each other" part is untrue. It is mostly going in one direction, towards Nvidia, and that's the reason they crossed $5 Trillion in market cap recently.

Not anymore.

https://www.reuters.com/business/nvidia-invest-100-billion-o...

Re: Tech companies are firing everyone to "fund AI", spending money on each other

#29

Post by jonway »

alephnerd wrote: post #11

Doesn't pass the smell test as someone who has been on boards that made these decisions. This would be like saying cloud spend was circular because F1000 tech companies represent the majority of cloud spend from a revenue perspective, but tend to sell or partner with those same organizations. For example, AWS and Zscaler, or GCP and Broadcom. Reality is, a lot of product lines were formed or overhired with little-to-…

I dunno, it doesn't pass the smell test that for a decade everyone was adding useless products and now in '25 they're all having their come-to-jesus. I also don't that buy everyone is firing to spend on AI either.

Re: Tech companies are firing everyone to "fund AI", spending money on each other

#30

Post by [deleted] »

dragonwriter wrote: post #6

We’re in a general economic decline masked, in some key aggregate measures, by the AI bubble. That’s the reason for the job cuts. Shuffling money around between AI adjacent companies may (but I doubt it) be enough to keep the AI bubble going through the downturn, in which case stockholders in those key companies manage to ride it out without pain, and executives too because they serve their constituency well. More li…

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