People have this misconception that first it was one way, and then <tech was released>, and they'll wake up and suddenly it is another. It's a slow creep. 10 years ago there were 5 of us on a team each responsible for something specific. Now I can do all of that. Teams and companies will downsize. How do you see AI creating more jobs? (I need some hope right now lol).

My hope is that there is a sort of Cambrian explosion of small software projects built by people who have absolutely no clue what they're doing. Many such projects will go nowhere, but some percentage of them will see success and growth. My second hope is that there will always come some threshold of complexity beyond which AI cannot effectively iterate on a project without (at minimum) the prompting of an expert in the field.

The combination of these two things could lead to a situation where there is a massive, startup-dominated market for engineers who can take projects from 0.5 to 1, as well as for consulting companies or services that help founders to do the same.

Another pair of hopes is that a) the LLM systems plateau at a level where any use on complex or important projects requires expert knowledge and prompting, and b) that because of this, the hype of using them to replace engineers dies down. This would hopefully lead to a situation where they are treated like any other tool in our toolbox. Then, just like no one forces me to use emacs or vim (despite the fact that they unambiguously help me to be at least 2x more productive), no one will force me to use LLMs just for the sake of it.

It's made it cheaper to do whatever it is you did therefore the demand for it will go up. It's somewhat of an open question of where the new equilibrium is. Historically that can go either way. We have fewer farmers that we once did because there's a limit to how much food people will eat. But we probably don't have fewer carpenters as a result of power saws and nail guns. We probably have more because the demand to build things out of wood is effectively unbound.

Massive job loss from AI requires one of two things: actual human-equivalent AGI or no increase in demand.

Focusing on option 2 and software development, teams and companies will only downsize if the demand for software doesn’t increase. Make the same amount of stuff you do now but with less people.

What I think will happen is that enough companies will choose to do things that they couldn’t afford or weren’t possible without AI (and new companies will be created to do the same) to offset the ones that choose to cut costs and actually increase the amount of people making software.

I am pretty sure these are well known economic ideas but I don’t know the specific terminology for it.

A few hundred years ago it took a team of 5 plus draft animals plough a field. Now one guy with a tractor can do it. Some teams and companies will downsize. New companies will appear doing things that we can't even imagine yet.