It’s important to keep in mind that a lot of jobs are ultimately bullshit jobs that simply exist to make companies look more valuable to investors. The selection pressures in the current environment favor building Potemkin villages to convince investors to give them money as opposed to actually being profitable in any way.
Incidentally, have a personal anecdote on the subject I can share. I worked for a startup a few years back, and when I was hired it had around 60 people. The app they were making was incredible simple, and in no way justified the size of the company. They were around for about half a decade already, yet they made very little actual revenue with most of the money coming from VC funding. Then the Silicon Valley Bank crashed, and all of a sudden funding started to dry up. As a result, they were forced to shift their business strategy towards being solvent. The company ended up letting go of most people cutting down to around 10 or so which was the realistic number of people needed to develop the product. They’re still around today, but their product architecture is much simpler and the size of the company is still much smaller.
I expect we’ll see a lot of this happening when the AI bubble pops. Companies will either figure out ways to actually be profitable, or they will simply go under. I expect the latter will be the case for the vast majority because they don’t have a viable business model. The crash will result in a huge reserve army of labor being created and the few surviving companies will have little trouble hiring people back. In fact, I expect that the dynamic will significantly shift in favor of the employers are a result.
It’s important to keep in mind that a lot of jobs are ultimately bullshit jobs that simply exist to make companies look more valuable to investors. The selection pressures in the current environment favor building Potemkin villages to convince investors to give them money as opposed to actually being profitable in any way.
Isn’t this in contradiction with the supposed value that generative AI creates for firms? The whole point of the hype bubble is the speculation that they will be able to eliminate jobs to save on labor costs.
Or just gesture at AI and not actually use it. In the example given, the firm started at around 60 people to attract investment and then stabilized at around 10. With AI hype they can skip that step where they start off with 60 people to attract investment and just start out with the 10 they really need, and explain their small startup staff as being a result of efficiencies created by AI.
Surely this is a real economy that produces real value and isn’t a circus tent of clowns picking each other’s pockets.
i’m working on an app that enables clowns to statistically identify the most profitable clown pockets to pick while siphoning off a small percentage for myself and a few dozen chatbots, perhaps you’d like to invest?
That’s the new paradigm the AI companies are selling. Their claim is that they will be able to eliminate a lot of the need for human labor that currently exists. If that were to actually happen then investors would have to adjust how they evaluate growth of the companies they invest into. The number of employees has always been just a lazy metric that companies learned to game anyways. This can easily end up being swapped for a different superficial metric like the number of LLM tokens the companies are consuming.
It’s important to keep in mind that a lot of jobs are ultimately bullshit jobs that simply exist to make companies look more valuable to investors. The selection pressures in the current environment favor building Potemkin villages to convince investors to give them money as opposed to actually being profitable in any way.
Incidentally, have a personal anecdote on the subject I can share. I worked for a startup a few years back, and when I was hired it had around 60 people. The app they were making was incredible simple, and in no way justified the size of the company. They were around for about half a decade already, yet they made very little actual revenue with most of the money coming from VC funding. Then the Silicon Valley Bank crashed, and all of a sudden funding started to dry up. As a result, they were forced to shift their business strategy towards being solvent. The company ended up letting go of most people cutting down to around 10 or so which was the realistic number of people needed to develop the product. They’re still around today, but their product architecture is much simpler and the size of the company is still much smaller.
I expect we’ll see a lot of this happening when the AI bubble pops. Companies will either figure out ways to actually be profitable, or they will simply go under. I expect the latter will be the case for the vast majority because they don’t have a viable business model. The crash will result in a huge reserve army of labor being created and the few surviving companies will have little trouble hiring people back. In fact, I expect that the dynamic will significantly shift in favor of the employers are a result.
Isn’t this in contradiction with the supposed value that generative AI creates for firms? The whole point of the hype bubble is the speculation that they will be able to eliminate jobs to save on labor costs.
exactly, now startup executives can bilk investors using ai to replace dozens of bullshit jobs with automated bullshit. think of the savings!
Or just gesture at AI and not actually use it. In the example given, the firm started at around 60 people to attract investment and then stabilized at around 10. With AI hype they can skip that step where they start off with 60 people to attract investment and just start out with the 10 they really need, and explain their small startup staff as being a result of efficiencies created by AI.
Surely this is a real economy that produces real value and isn’t a circus tent of clowns picking each other’s pockets.
That’s the new paradigm the AI companies are selling. Their claim is that they will be able to eliminate a lot of the need for human labor that currently exists. If that were to actually happen then investors would have to adjust how they evaluate growth of the companies they invest into. The number of employees has always been just a lazy metric that companies learned to game anyways. This can easily end up being swapped for a different superficial metric like the number of LLM tokens the companies are consuming.