There was an recent article on X with an interesting take - it could be that companies are doing layoffs not because AI is making them more productive but because it hasn't. Their costs have gone up paying for expensive AI but haven't seen any revenue benefits to offset it.

Article https://x.com/championswimmer/status/2051807284691612099

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stego-tech an hour ago | parent | next [-]

This genuinely wouldn't surprise me, and I need to go back to looking at balance sheets to see if I can sus out the validity of that narrative. As AI subsidization ends prematurely and costs skyrocket, we should expect to see those costs reflected in the operation statements of major customers.

Since I had Coinbase up for review already, I decided to peek there first for any sort of correlation. In 2023, their "Technology and Development" line item shows $1.32bn going out, and by 2025 it'd ballooned to $1.67bn. This is despite headcount actually contracting by almost a thousand people between those two statements, which would normally mean a smaller technology spend since a lot of corporate software is seat-based nowadays. This suggests that yeah, actually AI spend is creating a heavier drag on the balance sheets and it's being offset with layoffs since the "job replacement" narrative is strong. That said, I'd need to check dozens' more balance sheets to draw any sort of industry-wide conclusion.

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harel 2 hours ago | parent | prev | next [-]

This is no that far fetched... I don't think it's that common that a customer sits on the fence and says "If only company X had Y on their feature list I'll be a paying customer". So the speed at which the company now runs through its roadmap does not equate to new customers joining.

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boleary-gl 34 minutes ago | parent | prev | next [-]

I mean even this blog from Cloudflare reads a little like that.

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thrance 2 hours ago | parent | prev | next [-]

Personally, I think AI is just a convenient scapegoat for these mass layoffs. Also, these kinds of announcements contribute to sustaining the AI hype which all tech investors benefit from. And investors looove hearing about mass layoffs, stock goes up every time without fail.

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benmusch an hour ago | parent [-]

cloudflare stock went down, genius

investors are not some nefarious monolith cheering for companies to make decisions based on how it benefits The Vibes. they're analysts assessing business decisions.

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oytis an hour ago | parent | next [-]

It went down on poor earnings call. Layoffs were probably an attempt to soften the blow. Hard to tell what was the effect, because the two happened simultaneously

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surgical_fire an hour ago | parent | prev [-]

Wtf are you talking about? Investors are just gamblers with a fancier title.

They abaolutely invest based on vibes.

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benmusch an hour ago | parent [-]

then why did the riveting stock analysis above mis-predict the market?

	▲	surgical_fire an hour ago \| parent [-]
		Because the market makes no sense. It's just vibes. Trying to make sense of it is a fool's errand.

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szmarczak 2 hours ago | parent | prev | next [-]

I wouldn't argue that it doesn't give any benefits. However, it's not worth the current cost unless you already own RTX PRO 6000 to run any reasonable LLM. I'm using Claude Free and I'm happy with what I get, especially for the cost of $0.

I'm eagerly waiting for the prices to come down so I can upgrade my PC to AM5 and run Gemma 4.

	▲	j2jj 20 minutes ago \| parent [-]
		Its quite possible that LLMs become housed units like the next PC. Initially it starts off as being a large thing in data centers (like computers did) until they got smaller and smaller. Except I expect the time it takes to get smaller and smaller to compress much more - given that we live in a world with far more resources and risk-taking.

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13a07e686ca5 an hour ago | parent | prev [-]

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