[SirensOfTitan]

This is a classic HN mistaking the map for the territory. R&D and capex absolutely figure into de-facto profitability and sustainability for AI labs, despite their separate treatment in accounting.

> well most of us here on HN have benefited from decades of overinflated engineering salaries being paid by often companies that were not profitable and not only unprofitable

This is a really concerning perspective: people were paid what they were worth. Software is or was one of the few remaining arenas wherein a person can find a middle or upper middle class lifestyle consistently.

I will also note: a startup raising an 8 MM series A and eventually fizzling out is not the same at the hundreds of billions invested in these AI companies without a path to profitability. It is utterly absurd to pretend these are the same thing: any company ingesting that much cash needs to justify its capacity to survive.

[ForHackernews]

> any company ingesting that much cash needs to justify its capacity to survive.

What, why? There are tons of low-margin capex-intensive business out there.

I think AI will end up like being like hosting. All the models will converge to being pretty-decent and the companies will have to compete on efficiency since they are selling a generic commodity.

You can already see Anthropic fears this scenario since they try so hard to make people use their first-party tools rather than plugging Claude in as a generic part of a third-party stack.

LLM hosting is the next VPS.

[guzfip]

> Software is or was one of the few remaining arenas wherein a person can find a consistently.

I want to add something additional to this: it is one of the few fields that can afford middle or upper middle class lifestyle and is accessible.

I have no doubt if I could redo my life with the necessary resources I’d be more than capable of putting myself through med school and gone with a secure career that paid more than I ever made in software.

But at this stage of life? I don’t have the time or money to spend a decade+ paying some institution tens of thousands of dollars to hopefully maybe have a real career.

Once software as a career dies, I suspect many will find themselves locked out the middle class for generations.

[WarmWash]

It was kind of a flash in the pan moment where you could leave your retail floor manager job, crash course this thing called "javascript" in a 3 month class, and then get hired for a six figure remote job if you could choke out a mildly competent github repo.

[infecto]

Exactly. I don’t know why folks take so much offense to it. You could absolutely do just as you describe. Spend 3-4 hours truly working while enjoying the lunch today sessions and in-house lunch and barista. I definitely benefited from this and I am not ashamed of it but absolutely it was this weird moment in time.

[9rx]

> I suspect many will find themselves locked out the middle class for generations.

On the other hand, once software as a high paying career dies there will be nothing to prop up the status quo (high cost of housing, for example) so the middle class will return to being much more accessible to modestly paid jobs.

[fcarraldo]

> Software is or was one of the few remaining arenas wherein a person can find a consistently

Software salary inflation and expansion has made this the case. Tech’s accessibility to the educated has accelerated gentrification massively, rising up prices on rent and food. While the statement is correct, tech’s contribution to income inequality is part of the issue. If you’ve lived in Austin or Chicago (especially Austin) prior to ~2010 you’ll have seen this first hand.

[reverius42]

I don't think there are enough well-paid tech workers to affect things like the (national) market for food. Local rent markets are at least partly explained by this; I agree that the $3M houses near Palo Alto, CA are because of Big Tech salaries, but not the price of ground beef.

[fcarraldo]

Not at the nationally owned chain grocery store, but at local establishments it’s certainly an issue and prices out longtime residents who don’t work in this industry.

Rent prices push everything up in the local market. Housing rents impact business rents in an area, as well as what the business’ owners and employees need to maintain their own lifestyles. People who live there now can pay more and will, so prices go up. But the local shop owner isn’t getting rich, they’re still struggling as everything around them rises.

[keybored]

> This is a really concerning perspective: people were paid what they were worth.

Even interpreting what-they-were-worth in the usual sense, I’m not so sure about this. We have seen wage collusion reported by the usual US West Coast-based companies. And some news on here[1] have reported that some engineer with a salary of $100K[2] might be producing $1M of value. And even factoring in the usual “but benefits and overhead” comes out to a solid factor of profit per programmer/engineer.

Despite that the sense I get (only from this site since that is my only reference) is that the so-called overpaid engineers are incredibly content to just have this happen to them. As long as they are paid well compared to other workers, it’s fine. No matter the profit factor. In fact, the discourse is very much focused on how “privileged” they were if the tide ever changes. Instead of realizing how much value they provided, collectively.

Outlets for capturing more of the value they create is entrepreneurship (Hello HN). Never any collective organizing. And entrepenurship is easily bought via aqcuisition.

Collective bargaining would have been relevant in case they ever get automated... by the very software they co-created.

One could imagine that this “privileged” collection of programmers could have served as a vanguard for the collective good of programming professionals as well as collective ownership of software goods, using their privilege to that end. The former never happened, and the latter is partly realized in people’s free time (see the OSS maintainer in Nebraska meme).[3]

[1] All from recollection since this is just news from the Frontier to me

[2] Of course the pay might be much higher now; this might have been a while ago

[3] when it isn’t simply exploited by corporations just using OSS without giving any back; a logical turn of events when no license or law forces them to contribute back

[guzfip]

> As long as they are paid well compared to other workers, it’s fine.

Well I’m sure they’ll be thrilled to know they can collect $100 a week more in unemployment benefits than their neighbor.

[keybored]

I wasn’t alluding to them resigning or whatever this comment is referring to.

[reverius42]

I don't think you get to collect any unemployment if you resign.

[keybored]

Really.

[reverius42]

Yes, really. At least in the USA, you only get to collect unemployment if you are laid off -- if you are fired for cause, or leave your job of your own volition, you are not eligible.

[9rx]

> This is a really concerning perspective: people were paid what they were worth.

The parent comment doesn't discount that, only pointing out that "what they were worth" was inflated due to a speculative environment. Wherein lies your concern?

[lotsofpulp]

That prices change from one point in time to another is a trivial fact.

“Inflated due to a speculative environment” is not an accurate way to frame labor prices that held for many years. At that point, the prices were simply high due to high demand relative to supply (compared to other types of labor).

[9rx]

> At that point, the prices were simply high due to high demand relative to supply

That goes without saying. The investigation here is into demand. Which was said to be overinflated due to speculation. As noted, many of the companies hiring the developers did not have viable businesses.

[SirensOfTitan]

I think calling it inflated is to play to a narrative that labor was overvalued broadly in tech.

Salaries across industries in the US have remained flat since the 1970s. Calling the one sector that can provide access a middle class lifestyle inflated s to play into a narrative capital is eager to tell, even if OP didn't intend that.

[9rx]

> Salaries across industries in the US have remained flat since the 1970s

What do you mean? The real (meaning adjusted for inflation) hourly wage in the US has increased by around 20% since 1970.

What has changed since the 1970s is that wages are no longer coupled to productivity. Perhaps that is what you are thinking of? But that should be an obvious truism for anyone in tech. We create the very things that cause that to be the case!

[keybored]

> We create the very things that cause that to be the case!

What happened in the 1970’s was the NeoLiberal shift and wasn’t caused by software.

[win311fwg]

That NeoLiberal shift did not take place in a vacuum. It was a product of the world around it. It absolutely was caused by tech.

If we — those with the power to build the productivity creators — took a stand and said "we refuse to create tech for the interests of the few" it would have never happened. But, instead, we welcomed it and are responsible for it.

[keybored]

The corollary of “if we took a stand” is that Capital took a stand and collectively undid a lot of the gains of the post-WWII social democratic order.

So no. It wasn’t caused by tech beyond the uninteresting factors like modern society being complex and, of course, that tech developments influence things (pretty much all things).

[infecto]

Oh come on there are no “classic HN mistakes” here. Inference is profitable but bottom line is not yet. This is a very young industry and unlike those of the past, it’s much easier to picture a possibility of profitability. It’s absolutely different in that the marginal cost scales linear but solving for the R&D portion of a product where supply cannot keep up is a lot easier than some SaaS where the underlying product is not being used.

The salary jab was probably a little harsh.

Your ending is a bit of a fizzle too. There are many capex intense businesses that do just fine.