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The tech market is fundamentally fucked up and AI is just a scapegoat

bayramovanar.substack.com

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Re: The tech market is fundamentally fucked up and AI is just a scapegoat

#131

Post by micik »

peacebeard wrote: post #61
cong-or wrote: post #47

Interesting framing. The article makes a compelling case that we're seeing the hangover from 14 years of ZIRP-fueled hiring rather than an AI apocalypse. But I'm curious what people think the equilibrium looks like. If the "two-tier system" (core revenue teams + disposable experimental teams) becomes the norm, what does that mean for the future of SWE as a career? A few scenarios I keep turning over: 1. Bifurcation -…

I am 10+ years into my career. I don’t think mgmt / entrepreneurship feels like the only sustainable path. But I believe I may become a manager of a 5-10 Claudes.

What are your Claudes going to be building and who is going to fund it?

Re: The tech market is fundamentally fucked up and AI is just a scapegoat

#132

Post by atomic_reed »

kypro wrote: post #106

Personally I think all these posts miss 50% of the issue... I agree it's not AI, but I suspect it's only partially an interest rate story. Tech changed a lot from 2010 to 2020. Prior to 2010 almost everything built required a huge amount of development effort, and in 2010 there was still a huge amount of useful stuff to be built. Remember – prior to 2010 a lot of major companies didn't even have basic e-commerce stor…

Brother, the tech market is coming up to reality.

You and your good reasoning, but it means nothing to me.

Many of us will seek new a profession indeed: AI engineer. AI engineers mostly write code, but they are superior to software engineers...from the eyes of investors.

AI engineers mainly build abstract stuff: SaaS. They kill who the investors currently love the most: managers. 90% all managers will be replaced. 100 managers can be replaced with 10 managers and 10 security guards.

Then they kill 70% of the doctors, lawyers, and salesmen.

Then they kill 50% of the software engineers.

Then white becomes blue, and the eyes shift towards energy, transportation, and construction. The AI engineer, writes code like an AI, and notices these giant companies are sick. They can lobby all they want but the AI engineer and the AI lawyer will win.

Everybody who laughs now about software engineers being replaced has become serious, for the AI engineer has replaced the software engineer.

Let's see who is right in 2035. Your intelligence, or my fantasy.

Re: The tech market is fundamentally fucked up and AI is just a scapegoat

#133

Post by NoGravitas »

IMO, this is a not-wrong but less insightful perspective on what Ed Zitron talks about in The Rot Economy. Cycles of overhiring and layoffs happen, but they're not the core mechanism. AI isn't the cause, but it's also not a scapegoat. It's just the current placeholder, like blockchain and the metaverse, that allow companies to have their valuation based on growth rather than profit.

https://www.wheresyoured.at/the-rot-economy/

Re: The tech market is fundamentally fucked up and AI is just a scapegoat

#134

Post by zrail »

blenderob wrote: post #104
Bayramovanar wrote: post #88

Earlier quoted context omitted.

I will avoid getting into a “who understands economics better” debate. But factory workers usually require specialized machinery, tooling, and physical capacity, which makes overhiring slower, harder and more constrained. Those investments force more deliberate planning. By contrast, engineers mostly require a laptop and company hoodie... That low marginal cost makes it far easier to hire aggressively on expectations…

> By contrast, engineers mostly require a laptop and company hoodie. Alas, gone are the days when engineers too required specialized equipment like a desktop computer on the desk that you couldn't move with you. Every evening, you left it at office and went home to live a 100% home life. Alas, gone are those days.

Maybe for some. I've worked from home for 15 years and a huge thing that I've learned is that I have to have a hard physical boundary. My work laptop stays at my desk unless I'm on call and actively fighting a fire. When I want to use my desk for non-work things the work laptop gets put away.

Re: The tech market is fundamentally fucked up and AI is just a scapegoat

#135

Post by semiquaver » 

  > Till ~2010, a layoff was a sign of failure. It meant the CEO messed up.
  > 
  > In 2024, a layoff is a signal of “discipline.” Companies lay off thousands, and their stock price jumps.
Citation needed. Author started their career after 2010 so they are not basing that on personal experience. In my experience this is not true.

Re: The tech market is fundamentally fucked up and AI is just a scapegoat

#136

Post by lenerdenator »

j05ev1f3 wrote: post #52
jasode wrote: post #15

>In traditional industries like manufacturing you don’t hire 500 factory workers unless you have a production line that needs them. You don’t over-hire based on a guess. Traditional factories do make wrong guesses about the future and overhire all the time. Example: https://www.google.com/search?q=Ford+f150+lightning+laid+off...

The whole article rests on this false economic claim, that traditional industries don’t overhire based on expectations. They absolutely do, ALL THE TIME. Manufacturing, automotive, airlines, energy etc. all of them make demand bets and lay people off when those bets fail. Cheap money amplified this cycle, but this isn’t a tech specific "failure", it’s just how forecasting under uncertainty work. It’s incredible how s…

> Cheap money amplified this cycle,

This is more-or-less the rub.

Fortunately we had a kinda-sorta sane monetary policy under the Biden administration once the pandemic started to ebb, but now we've got Mr. Appearances trying to push Jerry Powell to make stupid mistakes.

Re: The tech market is fundamentally fucked up and AI is just a scapegoat

#137

Post by re-thc »

Bayramovanar wrote: post #88
j05ev1f3 wrote: post #52

Earlier quoted context omitted.

The whole article rests on this false economic claim, that traditional industries don’t overhire based on expectations. They absolutely do, ALL THE TIME. Manufacturing, automotive, airlines, energy etc. all of them make demand bets and lay people off when those bets fail. Cheap money amplified this cycle, but this isn’t a tech specific "failure", it’s just how forecasting under uncertainty work. It’s incredible how s…

I will avoid getting into a “who understands economics better” debate. But factory workers usually require specialized machinery, tooling, and physical capacity, which makes overhiring slower, harder and more constrained. Those investments force more deliberate planning. By contrast, engineers mostly require a laptop and company hoodie... That low marginal cost makes it far easier to hire aggressively on expectations…

> By contrast, engineers mostly require a laptop and company hoodie...

> That low marginal cost

Not true. That's how everything falls apart. Scaling software teams isn't simple. There's lots to account for. Do you just assume everyone commit to the same file and let it crash?

The more people, the more work is required to standardize, organize, document and fix gaps. You can say you're already at scale and things "should" be done but they never are. You hire a team into a specific area to find it was a giant hack supported by a part-timer and as you try to fix it the problems keep escalating.

Re: The tech market is fundamentally fucked up and AI is just a scapegoat

#138

Post by NoGravitas »

pjc50 wrote: post #39
cael450 wrote: post #31

Unfortunately, I think the next head of the fed is going to be appointed specifically to reduce interest rates, so we’re probably just going to go back to the 0-rate trough.

Quite likely. This will be great for growth. .. and terrible for inflation, but that can be blamed on other people.

Yes, it will, as always, be blamed on wages, even when wage growth is slower than inflation.

Re: The tech market is fundamentally fucked up and AI is just a scapegoat

#139

Post by aleph_minus_one »

Bayramovanar wrote: post #88
j05ev1f3 wrote: post #52

Earlier quoted context omitted.

The whole article rests on this false economic claim, that traditional industries don’t overhire based on expectations. They absolutely do, ALL THE TIME. Manufacturing, automotive, airlines, energy etc. all of them make demand bets and lay people off when those bets fail. Cheap money amplified this cycle, but this isn’t a tech specific "failure", it’s just how forecasting under uncertainty work. It’s incredible how s…

I will avoid getting into a “who understands economics better” debate. But factory workers usually require specialized machinery, tooling, and physical capacity, which makes overhiring slower, harder and more constrained. Those investments force more deliberate planning. By contrast, engineers mostly require a laptop and company hoodie... That low marginal cost makes it far easier to hire aggressively on expectations…

> But factory workers usually require specialized machinery, tooling, and physical capacity, which makes overhiring slower, harder and more constrained. Those investments force more deliberate planning.

> By contrast, engineers mostly require a laptop and company hoodie... That low marginal cost makes it far easier to hire aggressively on expectations and unwind just as aggressively when those expectations change.

Software engineers also need

- specialized machinery (at least when they have to upload to some computation cluster or cloud), think for example of the costs for GPU/TPU clusters for AIs at the moment

- tooling: depending on the sector, the license costs for the sector-specific business software can be similar as expensive as specialized machinery

- mental capacity (instead of physical capacity)

Re: The tech market is fundamentally fucked up and AI is just a scapegoat

#140

Post by _m_p »

Bayramovanar wrote: post #88
j05ev1f3 wrote: post #52

Earlier quoted context omitted.

The whole article rests on this false economic claim, that traditional industries don’t overhire based on expectations. They absolutely do, ALL THE TIME. Manufacturing, automotive, airlines, energy etc. all of them make demand bets and lay people off when those bets fail. Cheap money amplified this cycle, but this isn’t a tech specific "failure", it’s just how forecasting under uncertainty work. It’s incredible how s…

I will avoid getting into a “who understands economics better” debate. But factory workers usually require specialized machinery, tooling, and physical capacity, which makes overhiring slower, harder and more constrained. Those investments force more deliberate planning. By contrast, engineers mostly require a laptop and company hoodie... That low marginal cost makes it far easier to hire aggressively on expectations…

The low marginal cost also means that the job market is easier for software engineers in times when expectations are optimistic.
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