[TeriyakiBomb]

In reality there are two kinds of layoff going on.

Idiots who truly believe that AI will actually replace a significant amount of the workforce (Long term, it will not but some jobs displaced) and those who have internalised that ZIRP is over, they need to be more lean as VCs have closed their wallets and saying "We've revolutionised our workflow with AI" than "We haven't turned huge investment debt into profit in 5 years and we need to reduce headcount for even the slightest chance of that happening, or at least raise again by saying 'AI' over and over" has far better optics.

[dgellow]

But we see layoff from companies that are making record profits, how does that fit here? Are you saying all of them are AI-idiots?

[thisislife2]

I would say that just the old "stupid" corporate practice of overhiring - for stock manipulation, reduce the talent pool for competitors etc. - Why Do Companies Overhire Just To Lay Off? - https://www.youtube.com/watch?v=KCF78a2wTHM

[techblueberry]

I think my read of it would be something like extreme short term thinking, and essentially like a push your luck game. If we can make it to the next model, maybe we can get enough productivity to reverse course.

As I understand it there are some underlying problems in the industry. Companies aren’t exiting which means VC’s aren’t getting returns and investment is slowing. In order for NVIDIA to maintain its current valuation, it has to keep growing at the rate it’s been growing which is the time during which companies have been piling on debt to perform extreme investments in AI. On top of this the growth rate is also based on extreme circular dealing.

So the whole thing isn’t sustainable, but the crash doesn’t happen until some big player blinks and their forecast / valuation goes down. And the only path to the kind of growth / gains people saw during the peak of the internet era is through AI.

Probably none of these big companies will fail, but it will be deeply uncomfortable for all of them when the music stops. And I wonder if it bankrupts a swath of the current generation of VCs.

[TeriyakiBomb]

That's the less common third kind. late 10s tech spending was absurd, it's the same excuse as the first but again, an easier way to reduce Capex for staff they don't need.