A common misconception about AI is that it is intended to fully replace humans, which is incorrect. The purpose of AI is to reduce the need for human labor, and it has already been doing so. For example—though this is not an exact figure—a task that previously required 15 people might now only need 10. In no instance has the human element been completely replaced; rather, the reliance on manual labor has simply been reduced.
There are a lot of bad CEOs, though. It's a lot like a politician -- it's quite difficult to become a CEO, and the skills to make it to that position don't always intersect nicely with the skills necessary to actually do the job well.
The primary product of AI is labor displacement and consequently wage supression. This is what OpenAI and Anthropic are really selling. It didn't start with AI but AI is accelerating it.
This is what layoffs have been about since the pandemic. People in fear of losing their jobs do extra unpaid work and aren't asking for raises. The theoretical potential of AI gives companies the excuse to fire more people. The investment itself is directly used as a reason of why they need to cut back on labor.
Any sufficiently sized business can only feed the insatiable hunger for ever-increasing profits ultimately by cutting costs and raising prices. And what do we have now? High inflation and a decline in real wages. CEOs are just following this playbook.
And the result is that society is bouldering towards collapse. We're seeing the first hints of this with the youth unemployment crisis [1][2][3].
Also, who is going to buy anything when nobody has any money?
Reminds me of the old joke "90% of the code is 90% of the work. The last 10% of the code is the other 90% of the work."
I have spent almost my entire adult life (since 1986) shipping products. One of the very first things that I learned, was that "shipping" > "designing".
There's so much work in delivering products that will carry your brand, and then must be supported.
I liken it to having children. Conceiving them is fun. Delivering them is painful. Raising them, is a lifetime of work.
In my experience, the same type of thing applies to products that we ship (and charge money for).
Honestly I am burned out on public discussion of AI. There are so many hot, low info takes on both sides. All the dumb stuff revolves around this imbecilic notion that AI will take your job.
In that sense Altman and Dario et. al. were extremely successful in their cringeworthy campaign to establish themselves as priests of a new machine god religion. Even the people who don't want it believed them.
The good news is at least this year companies are starting to get a little more thoughtful about why they're paying for AI and what specific business function it serves.
Realities:
1. AI is a tool. You don't replace a job with a tool, just like you don't replace an apple with a sock. It was always an error of classification to think this way.
2. AI is a useful tool. For every CEO who thinks it justifies mass layoffs, there are dozens of people who don't want to admit that it does have a lot of utility. Anyone who isn't figuring out where this tool can make them more productive will have a hard time down the line imho.
3. We can infer from the priors that jobs will continue to be a thing, just like they still were after the inventions of printing presses, cars, power looms, etc. but there will be some pretty massive churn, some roles maybe disappearing entirely, new ones getting created, same goes for skill sets.
4. Businesses will use this churn to the best of their ability to either reduce costs or increase output. That second part is the key the AI haters don't seem to recognize. Thanks to competition, not every business wants to just fire everyone. Yeah, America's financialized and monopolized and less competitive than it used to be, but still, plenty of businesses will repurpose their budgets to produce more and expand.
So in terms of real specific and concrete things I've seen so far.
If you're in customer support that's a pretty rough spot, a well designed RAG system can turn 20 minutes of research into 20 seconds. Customer support budgets flow downstream from actual usage/customer base so if they can do more with less people will get laid off, they don't expand scope, they automate and cut the budget.
If you're a developer, your position's a lot more secure than that, coding agents are pretty incredible but they are simply not at a point where they can think through architectural decisions, and they occasionally go off the rails and trash everything. These things need to be operated and steered. Yes that's 100% the future of the profession and I'm sorry if someone doesn't like that, being a blacksmith who forges metal things by hand is also very niche these days, kind of sad if you loved blacksmithing but it happens. Devs also have to be aware that a PM/product owner can likely do some of their job now and I think any dev whose preference was to avoid thinking about customer or business requirements is going to find his utility is shrinking. A mass shrinking of the profession is unlikely but things will change and the only rational paths forward honestly are to retire or to figure out now how you fit in, it's a career opportunity if you get ahead of the curve even.
Lastly there is a whole other domain now which for lack of a good term I'll refer to as "prompt engineering," it requires some level of systems design thinking, but basically no programming expertise. The best candidate for this work is a person who possesses business process knowledge as well as systems oriented thinking. Maybe these jobs will end up finding a home in the IT department or something. As an economy we're barely recognizing them yet but I see that in engineering we can increasingly implement places for a prompt input, and then hand some workflow/business domain decisions off to someone who understands them better and they just tweak their prompts over time to get a great system. Pretty sure new jobs will be created and formalized around this over time.
Beautifully said. Engineering is often just a cost center and I often have the feeling management is suspicious that the engineers are just wasting time and throwing up roadblocks for nothing. This in turn makes managers always on the lookout for "the shortcut" to cut out as many of those engineers as possible.
There is a definite lack of appreciation for the often repetitive grit, toil and maintenance work required to just have profit generating working software running reliably in production.
Or more like the last 20% of work takes the same effort as first 80% of work. Which is the 80/20 rule. But increasingly I believe the 90/10 rules works better.
As a matter of fact I tend to think of it the first 80% is 80% of work, the 80% of the 20% left is same as first 80% of work. The last 4% polishing is another first 80% of the work. I think that is a good rule for general project management.
>> Yes, the tools are powerful, but a CEO who thinks they replace the work of employees is simply a bad CEO.
This is a broad generalization of employees. There will be some "routine tasks" that can be done by AI, now that is a lot more powerful.
There won't be as many employees needed for routine work - for example L1 and L2 support work. For example, many companies had ML engineers building models for various models. Companies can get that off the shelf from AI companies. They don't need a big team of model builders now.
Similar to Tesla naming it's driver assistant "auto-pilot" in 2015 and your average Joe thought he would be able to sleep while the car would drive him to work.
The CEO just hear AI and think of AGI. They expect Skynet.
A story from today - I needed a small utility to remap my logitech buttons under windows without installing their horrendous GHUB. Logitech Onboard Memory Manager still required ghub to be put into onboard mode.
The solution - linux has utility called piper. I downloaded the repo and just told codex - figure out what piper is doing and create me a small utility to do it under windows. So the jolly critter started experimenting with hex commands, then pulled some other repo on which piper depended figured out how to enable said onboard mode and 10-sh minutes later I had small python script that did what i needed to do.
That would have taken probably half a day of work for a human.
There are many stupid CEO and organizations which are not committed to quality. And a lot of employees that are too set in their ways. But the instinct that underinvesting in AI is more dangerous than overinvesting is right. Doomed if you do, doomed if you don't
"To err is human, but to really foul things up requires a computer" - this is from the 60, but right now is turned into overdrive.
and I don't know what worries me more - a burst in this bubble (and maybe some other tech stocks), or a failure of these valuations to be burst somehow, and even more concentration of capital and power around those corporations.
Most CEOs are not special. They are not especially smart, or skilled, or technical. The role self selects for sociopathy. That's not a quality that has any kind of linear relationship with intelligence. Quite the contrary.
CEOs are probably the most replaceable position, period, by human or AI. Everyone just gives them information. They don't know any information themselves.
Problem is, a CEO can fire employees, find out it was a dumb decision, then leave with a million dollar severance package. So they don't really care when they're wrong.
This is a great article, and I agree with most of it.
The problem is that the wrong eyes are seeing it.
We need these kinds of articles to be published in places that executives read, and tailored to their audience.
AI recovery is going to be a big wave of consulting over the next several years, maybe very publicly or maybe quietly, but it's going to be a thing. That doesn't mean "all AI is bad" or any other such nonsense, it means that there are a lot of companies out there right now that are doing it wrong and will need help.
The executives that get ahead of this are going to be the winners.
CEOs understands that AI offers potential productivity increases. Using that productivity boost to cut staff is an unimaginative approach. Bolder approaches include using that boost to exceed the expectations of current customers, or to increase sales without proportional increase in staff, etc.
78 comments
[ 7.3 ms ] story [ 82.9 ms ] threadTech CEOs are apparently suffering from AI psychosis
https://news.ycombinator.com/item?id=48295679
I believe there are entire companies right now under AI psychosis
https://news.ycombinator.com/item?id=48153379
It literally just requires filing an LLC or Corporation. There are several SaaS companies that will do it for you.
This is what layoffs have been about since the pandemic. People in fear of losing their jobs do extra unpaid work and aren't asking for raises. The theoretical potential of AI gives companies the excuse to fire more people. The investment itself is directly used as a reason of why they need to cut back on labor.
Any sufficiently sized business can only feed the insatiable hunger for ever-increasing profits ultimately by cutting costs and raising prices. And what do we have now? High inflation and a decline in real wages. CEOs are just following this playbook.
And the result is that society is bouldering towards collapse. We're seeing the first hints of this with the youth unemployment crisis [1][2][3].
Also, who is going to buy anything when nobody has any money?
[1]: https://www.americanprogress.org/article/americas-10-million...
[2]: https://www.brookings.edu/articles/twelve-ways-to-fix-the-yo...
[3]: https://www.bbc.com/news/articles/cy026x9jpd0o
I have spent almost my entire adult life (since 1986) shipping products. One of the very first things that I learned, was that "shipping" > "designing".
There's so much work in delivering products that will carry your brand, and then must be supported.
I liken it to having children. Conceiving them is fun. Delivering them is painful. Raising them, is a lifetime of work.
In my experience, the same type of thing applies to products that we ship (and charge money for).
In that sense Altman and Dario et. al. were extremely successful in their cringeworthy campaign to establish themselves as priests of a new machine god religion. Even the people who don't want it believed them.
The good news is at least this year companies are starting to get a little more thoughtful about why they're paying for AI and what specific business function it serves.
Realities:
1. AI is a tool. You don't replace a job with a tool, just like you don't replace an apple with a sock. It was always an error of classification to think this way.
2. AI is a useful tool. For every CEO who thinks it justifies mass layoffs, there are dozens of people who don't want to admit that it does have a lot of utility. Anyone who isn't figuring out where this tool can make them more productive will have a hard time down the line imho.
3. We can infer from the priors that jobs will continue to be a thing, just like they still were after the inventions of printing presses, cars, power looms, etc. but there will be some pretty massive churn, some roles maybe disappearing entirely, new ones getting created, same goes for skill sets.
4. Businesses will use this churn to the best of their ability to either reduce costs or increase output. That second part is the key the AI haters don't seem to recognize. Thanks to competition, not every business wants to just fire everyone. Yeah, America's financialized and monopolized and less competitive than it used to be, but still, plenty of businesses will repurpose their budgets to produce more and expand.
So in terms of real specific and concrete things I've seen so far.
If you're in customer support that's a pretty rough spot, a well designed RAG system can turn 20 minutes of research into 20 seconds. Customer support budgets flow downstream from actual usage/customer base so if they can do more with less people will get laid off, they don't expand scope, they automate and cut the budget.
If you're a developer, your position's a lot more secure than that, coding agents are pretty incredible but they are simply not at a point where they can think through architectural decisions, and they occasionally go off the rails and trash everything. These things need to be operated and steered. Yes that's 100% the future of the profession and I'm sorry if someone doesn't like that, being a blacksmith who forges metal things by hand is also very niche these days, kind of sad if you loved blacksmithing but it happens. Devs also have to be aware that a PM/product owner can likely do some of their job now and I think any dev whose preference was to avoid thinking about customer or business requirements is going to find his utility is shrinking. A mass shrinking of the profession is unlikely but things will change and the only rational paths forward honestly are to retire or to figure out now how you fit in, it's a career opportunity if you get ahead of the curve even.
Lastly there is a whole other domain now which for lack of a good term I'll refer to as "prompt engineering," it requires some level of systems design thinking, but basically no programming expertise. The best candidate for this work is a person who possesses business process knowledge as well as systems oriented thinking. Maybe these jobs will end up finding a home in the IT department or something. As an economy we're barely recognizing them yet but I see that in engineering we can increasingly implement places for a prompt input, and then hand some workflow/business domain decisions off to someone who understands them better and they just tweak their prompts over time to get a great system. Pretty sure new jobs will be created and formalized around this over time.
There is a definite lack of appreciation for the often repetitive grit, toil and maintenance work required to just have profit generating working software running reliably in production.
As a matter of fact I tend to think of it the first 80% is 80% of work, the 80% of the 20% left is same as first 80% of work. The last 4% polishing is another first 80% of the work. I think that is a good rule for general project management.
This is a broad generalization of employees. There will be some "routine tasks" that can be done by AI, now that is a lot more powerful.
There won't be as many employees needed for routine work - for example L1 and L2 support work. For example, many companies had ML engineers building models for various models. Companies can get that off the shelf from AI companies. They don't need a big team of model builders now.
A* search -> AI
Backtracking -> AI
Neural Networks -> AI
Fuzzy Logic -> AI
Genetic Algorithm -> AI
Deep Learning -> AI
Generative "AI" -> AI
Similar to Tesla naming it's driver assistant "auto-pilot" in 2015 and your average Joe thought he would be able to sleep while the car would drive him to work.
The CEO just hear AI and think of AGI. They expect Skynet.
Astronaut holding up gun to other astronaut
Always have been.
The solution - linux has utility called piper. I downloaded the repo and just told codex - figure out what piper is doing and create me a small utility to do it under windows. So the jolly critter started experimenting with hex commands, then pulled some other repo on which piper depended figured out how to enable said onboard mode and 10-sh minutes later I had small python script that did what i needed to do.
That would have taken probably half a day of work for a human.
There are many stupid CEO and organizations which are not committed to quality. And a lot of employees that are too set in their ways. But the instinct that underinvesting in AI is more dangerous than overinvesting is right. Doomed if you do, doomed if you don't
"To err is human, but to really foul things up requires a computer" - this is from the 60, but right now is turned into overdrive.
There are also a LOT of bad software developers.
When they meet, the software developer is fired.
The CEO exits after a while, after exercising their stock options...
https://tomtunguz.com/spacex-openai-anthropic-ipo-2026/
and I don't know what worries me more - a burst in this bubble (and maybe some other tech stocks), or a failure of these valuations to be burst somehow, and even more concentration of capital and power around those corporations.
Problem is, a CEO can fire employees, find out it was a dumb decision, then leave with a million dollar severance package. So they don't really care when they're wrong.
The problem is that the wrong eyes are seeing it.
We need these kinds of articles to be published in places that executives read, and tailored to their audience.
AI recovery is going to be a big wave of consulting over the next several years, maybe very publicly or maybe quietly, but it's going to be a thing. That doesn't mean "all AI is bad" or any other such nonsense, it means that there are a lot of companies out there right now that are doing it wrong and will need help.
The executives that get ahead of this are going to be the winners.
CEOs that look at that and think they need to reduce headcount seem to also be signaling they don’t know what to do with increased resources