| I was alive when the internet was not a thing and remember my neighbor getting a beefy hotrod 486 which was significantly faster than my 286 I scrapped together a lot of money for as a kid. I liken AI to more like sewing machines. Lets say our factory output was 10 tshirts a day by hand sewing. When sewing machines came around, we din't make 10 tshirts by 8:30am, send everyone home and pat ourselves on the back. Instead we just increased output per worker and kept investing. This drove the cost of goods way down, to the point where a negative pressure equilibrium was reached in the market: making tshirts any cheaper you'd have to give them away (which, 100 years ago was an absolutely absurd proposal, yet today is so common its sort of laughable). This lead to people moving out of the industry but new people moved in (industrial and chemical engineers, material scientists, technicians, mechanics etc). In my mind, CEOs that are firing their staff are: 1. Making up for past over-hiring mistakes during Covid 2. Cashing future investment in for today's temporary gains. we're in an economic pinch right now, so not surprised to see layoffs. AI firings are just an excuse; if this happened in 2016, you'd be rolling out AI to every employee in your company to outproduce your competitors. You can't cut your way to success. |
According to all of their latest earning calls, Amazon, Google (?), Microsoft and Apple have all said their revenue growth was constrained by lack of TSMCs manufacturing capacity to get the chips they needed.
All four of them could stop developing new software for a couple of years and not lose any customers. You could probably say the same about the second tier companies like Salesforce and Uber.
The difference is that while the slope might be lower for sales/employees for physical goods as technology gets better, you don’t need more software engineers as more of your digital products are sold