Everyone has been talking about whether AI is automating software developers out of a job. It does seem harder to get a programming job now, but it’s not as simple as “AI is making junior developers obsolete”. Surely it is easier to build software with the help of LLMs, but it still takes time. Software development has gotten faster on many separate occasions. Each boost has seen salaries go up not down. What is so special this time? There are several factors that could be contributing.
Higher interest rates mean that more capital goes into treasuries, corporate bonds, and other more assured investments, and less money goes into hiring software developers to write software that may or may not be valuable in the future.
The AI wave is very capital-intensive. Money that used to go towards developer salaries is now being used to buy GPUs, train models, build out data centers, and bid up stock prices.
As of 2022, software is taxed as R&D. It is no longer considered a normal tax-deductible business expense, but can only be an expense amortized over the course of five years.
There is less software that needs building. Software has been eating the world for quite a long time now. A lot of the software that needed to be written for the Great Digital Revolution largely has been written. We simply don't need to build AWS or Instagram or Uber anymore. They already exist.
It is easier than ever to build software, even without help from AI. You can spin up hundreds of VMs all around the world in a couple of seconds. Quality libraries exist for all sorts of niches. As was always the promise, a single developer can do more with less. We have been automating ourselves this whole time.
The workforce has been growing. There are more software developers now than there ever have been, and they have been growing more experienced every year.
The first three bullets here together are a big deal: there is a lot less money going towards hiring. The last three could be very meaningful, but are happening more gradually and are not as clearly synchronized with the current hiring freeze.
All else being equal, you might expect AI to make the job market bad indefinitely. But suppose the tax code gets rolled back, interest rates fall, and data centers are no longer the rage? I could certainly see the winds changing.
I don’t really have a conclusion, but I hope I’ve identified some of the complexity here. There should be a word for that… “welp”? “finito”?