Opening in a private window solved the issue, however I'm pretty sure I don't regularly read anything on this site (maybe never was an overstatement?).
This year alone something like 400B was spent on investing in chips, datacenters, electricity buildouts. That's 400B that could have otherwise been invested in people.
While i don't doubt that people will find a few solid business cases for LLMs, i am on team-bubble. I don't think this investment will add 400B worth of value and I very much doubt that this 400B is any good for future growth or long-term aspirations of AGI. Investing 400B into people and (tech) manufacturing would be a solid long-term bet with benefits.
I use mobile services timeboxed and in conjunction with blockers for certain services. I also went back to use old-school pencils and paper for work whenever possible. It is helpful - and fun.
Blocking mobile internet on smartphones improves sustained attention, mental health, and subjective well-being: https://academic.oup.com/pnasnexus/article/4/2/pgaf017/80160...
Brain Drain: The Mere Presence of One’s Own Smartphone Reduces Available Cognitive Capacity: https://www.journals.uchicago.edu/doi/full/10.1086/691462
Students getting lazy, or dropping out of subjects entirely because they don't think they have a future in them.
Depression and a general feeling of despair. I see this in programming communities quite a bit - people who see LLMs as an existential threat to their careers and that they have wasted their lives getting good at something which is now being devalued.
"ChatGPT psychosis" - where people talk to LLMs and have unhealthy thought patterns reinforced by them to disastrous ends - gets a ton of coverage. But what about these milder but still meaningful effects where the very existence of AI disrupts people's future plans and self-worth even if they're not using it at all?
https://podcasts.apple.com/us/podcast/conversations-with-tyl...
It was a bit towards the end, I think.
When we’re all brain rotted and unemployed, how will we spend money on corporations? Its a spiral.
If others are slacking, it's an opportunity to level up and stand out. Also, IMO there are market forces currently reshaping the jobs landscape, it's not only AI, I don't even think AI is the main driver.
And investment and experiments by definition include the risk of failing. In almost everything lies a survivorship bias and no one talks about the 100+ car makers that went into goldrush mode 100+ years ago. This is life. Netflix vs Blockbuster - already forgotten?
Also the "fail rate" - so what part is failing and why? What's with the 5%? If we have a look at exponential functions this might be a really good deal, if the 5% can account for the losses. After all, benefits compound over time.
I witnessed first hand in FAANG some quota hires and I believe that now that no one gets paid for contrived and artificial business advantages, we are back to a more merits based evaluation of workers.
But AI should not be written off as fancy something with no impact. That's the wrong take. Whether it will be a springboard to new jobs that compensate for losses or replacements - I am not yet sure, but tent to be in the former group. ML engineers take care of ML - something new that takes care of something new.
We will see.
https://www.futuriom.com/articles/news/why-we-dont-believe-m...
https://www.cnbc.com/2025/11/04/white-collar-layoffs-ai-cost...
Oh I totally agree with you, this was just the first thing that came up in a Google search. The criticism of MIT’s study has been going around widely, this site isn’t the only one saying that this study lacks objective metrics.
Given all those articles with AI generated images I bet that some artists lost their jobs
Over the last 20 years of tech, the giants have taken the smartest folks out there and put golden handcuffs on them. You could hire up all the smart folks and put them to work, or leave them out there and have them compete with you. With the launch of cloud providers and (expensive) dynamic scaling the problem only got worse. Think about hiring in the pandemic. Every one at home, with a stimulus check and nothing to do. Rather than a flurry of new software you got mass hiring.
But now we are in a capital intensive hardware cycle. Where in order to compete you need to have lots of $$$$ as well as software know how. It does not matter that there are smart people out there, without hefty backing they wont get very far.
I suspect that software is about to enter its "punk" era. We have software for small businesses that will help with accounting, HR, customer service, and cloud providers are starting to see some interesting competition. Much like the old punk poster showing you 3 chords and telling you to start a band it is entirely possible to find three friends and start a business that makes 1-10 mill a year with little effort and lower costs. The moment you stop thinking "unicorn" and start thinking "sustainable" the economics shift radically.
I don't think that ChatGPT coding is valuable but rather it's ability to tutor people and guide them towards idiomatic patterns.
340 millon Americans. Reach 10k of them at 10 bucks a month and you have a business that pays for a couple people to live comfortably.
https://bloomberry.com/blog/amazons-layoffs-tell-half-the-st...
Doesn’t it affect big tech companies? Only startups?
I would guess the opposite, with big companies being much more savvy and influenced by fiscal incentives.
Even Japan has become pro-Indian on immigration for tech: https://eastasiaforum.org/2025/11/06/takaichis-japan-looks-t... Wtf...
So you basically can pay an Indian immigrant a junior dev salary, for significantly-better-than-junior-dev work. It's just stonks.
Here is an article putting together data from GitHub about SW developers per country.
https://data-player.com/highest-number-of-software-developer...
When talking about outsourcing jobs from the U.S., you’re obviously gonna exclude the U.S. China is also not a factor. Neither are Western European countries or countries like Japan and S Korea because of relatively high salaries. Russia is out due to long standing geopolitical issues.
That basically leaves Brazil and Indonesia as the only alternatives to India in the top 10 and combined they don’t even have half the number of SW developers as India.
You need to then add Mexico, Vietnam, Turkey, Philippines and Poland to the above 3 to add up to the number of SW developers present in India.
Thats why the outsourcing industry is concentrated in India. You can setup 1 office in India and have access to as many SW developers (Indians are also very willing to migrate domestically, so an office in a single city is sufficient to cater to the entire domestic developer market) as you would if you setup 8 offices in & different countries across 4 continents.
>70% is a pretty insane number that certainly speaks for itself.
Also, when you start giving a lot of tech jobs to people from one specific country, then the github developer numbers will naturally reflect that.
It is easy to make the 'cheap' argument when you talk about outsourcing but it no longer makes sense when you look at h1b numbers.
There’s a lot of opportunities for personal networks, nepotism and plain old corruption to work. (Who is going to figure out that somebody dropped a few gold coins to your sibling as a kickback?) There’s a much smaller network of people with relationships to Eastern European or other companies.
Unlike eastern Europe, India is geopolitically in a pretty good spot right now, having decent relations with most developed countries, and not engaged in any major wars with its neighbors. The last company I worked for outsourced a lot of work to Russia. At a certain time in 2022 they suddenly had to shift a lot of that work to... India!
Indians are more visible, but salary expections have gotten extremely out of whack in the US, and extended WFH during COVID proved to most boards that companies can continue to operate when entire teams are communicating async.
If a large portion of interns and NCGs in the US are essentially expecting $45-70/hr salaries, it just isn't sustainable especially when factoring the growing skills deficit because universities failed CS students to a certain degree over the past 10 years by watering down programs in a short term bid to compete against bootcamps.
If we are paying Bay Area salaries, we expect performance comensurate to that salary. Basically, all companies are now starting to adopt the Netflix model of hiring in the US.
My other comment: https://news.ycombinator.com/item?id=45867014
Poland [0][8]
Ireland [1][2]
Czechia [3][4]
Canada [5][6]
Turkiye [7]
The expansion of Indian offices is a result of the reverse brain drain that accelerated during the early COVID layoffs along with the EB1/2 backlogs - a number of Staff and above Engineers, EMs and above, and Sr PMs and above who were on work visas were either cut or given the option to relocate to India and start a hub office.
A similar trend happened in other countries, but India being so large means they get overshadowed.
[0] - https://www.gov.pl/web/primeminister/google-invests-billions...
[1] - https://www.amd.com/en/newsroom/press-releases/2023-6-20-amd...
[2] - https://enterprise.gov.ie/en/news-and-events/department-news...
[3] - https://www.itpro.com/business/cato-networks-announces-major...
[4] - https://www.onsemi.com/company/news-media/press-announcement...
[5] - https://www.reuters.com/business/lyft-open-toronto-tech-hub-...
[6] - https://www.connectcre.ca/stories/amazon-plans-toronto-offic...
[7] - https://www.reuters.com/world/middle-east/uber-invest-200-ml...
[8] - https://news.microsoft.com/pl-pl/2025/02/17/microsoft-announ...
[1] only $135 Million
[2] only 1,300 new employees (over 6,000 current); meanwhile "Apple India leases [...] likely to be one of the largest single-tenant office leases in [Bengaluru]" https://timesofindia.indiatimes.com/technology/tech-news/app...
[3] Never even heard of Cato Networks, and no figures. So irrelevant.
[4] onsemi manufacturing $2bn, not relevant as this is manufacturing numbers (Apple India is expanding multiple times that)
[5] No numbers, 2,934 employees. Mentions increment 20% of local market and an acquisition. Not relevant.
[6] Amazon plans 8,500 employees in the two [Canadian] cities. Meanwhile "Amazon to invest $233M to strengthen India operations network" https://www.aboutamazon.in/news/operations/amazon-to-invest-... (OTOH: they are laying off 800-1000 in India, out of over 15,000 desk employees just in Hyderabad)
[7] Uber to invest $200 mln in Turkey. Peanuts compared to the billions in my links.
From your submissions it seems like you are Indian or something.
You mean cost of living and inflation has devalued the dollar.
On top of that, both the British and Canadian governments give some degree of tax subsidy and regulatory support, though not to the degree that India, Israel, Poland, Czechia, or Romania provide.
Why should I pay Jeff from NCSU a US$175K TC in RTP when I can get Jane who chose to return to Toronto after living in the US working for large companies throughout her 20s?
A lot of techies on HN really underestimate the amount of reverse brain drain that happened during and after COVID. The COVID layoffs in early-mid 2020 primarily targeted those on some kind of work visa, and a number of those laid off were given the option to take a pay cut but also open a node in their home country.
Edit: can't reply so replying here
> I hear this, but the fact is a 70% pay cut in the Bay Area would simply not be workable at all
This is why we began opening offices in RTP, Denver, Chicago, NYC, etc in the 2017-22 period because we could pay closer to London or Toronto salaries back then in those offices and we had state level support.
All of that went to the wayside after COVID because a large portion of our workforce reverse braindrained, and someone in RTP demanding WFH and a Bay Area salary in a metro where CoL is comparable to Fresno and where we had to spend significant amounts of capital in commercial real estate to unlock tax benefits is ridiculous.
We are fine paying high salaries and TC, but it needs to be justified by actually high tier talent. Think the Netflix model.
The response is inflation. It would only be a solution if it works, and of all the countries or empires that tried it in the past you'd be hard pressed to find one that succeeded at correcting their economy long term by debasing their own currency.
Edit: can't reply but every single white collar job provides an employer healthcare plan that is equally as competitive as the public healthcare plans in Canada and the UK.
And especially if you were being paid $50/hr as a new grad in 2014.
Edit 2:
> And I was in Michigan.
All the more reason I would have pushed back severely. It's easier to find talent at scale in London or GTA - metros there have a population larger than the entire state of MI, and with a breadth of options beyond UMich Ann-Arbor.
On sheer metrics of access and quality, America kicks the shit out of Europe and Canada
The key word there is employer. Contractors often don't get health insurance, and contract jobs are not uncommon in the US.
How much do you pay annually out of pocket for health insurance premiums and other healthcare expenses?
In the US that expense is very high, and is a major source of worry for working families.
I guess GCC night be Global Capability Center?
NCG - New College Grad
You ain't dense btw, it's a good question. Keep asking questions!
It’s genius, in a way.
They have a few very competent developers who are primarily in the secondary sales in my experience. First sales contact is between non-technical management and their front-line sales (usually very attractive women). In the second sales contact, technical staff from the potential client is involved and they bring along their real developers. But those are not the ones you'll get on the project. They'll give you interviews with the developers you can get, and they're coached for the interviews and sound fine. But then in reality they are people who can't touch type and develop purely by trial and error without forming a mental model.
If hiring locally wasn't such a mess, nobody would talk to them. At some point even a junior developer is better than not having a developer at all. I assume AI will change that and they'll get replaced first.
If anyone is worried about their job, it won't be AI that takes it - it will be outsourcing. The US offshores 300k jobs per year with a high percentage of them being IT (60-80% depending on source). It's really not that different to the offshoring of manufacturing decades ago. Why pay people onshore when you can pay someone in India half of that? Any job that doesn't require a physical presence or has legal pressures to keep it onshore will be at risk. It will likely get worse over time, just like manufacturing. I don't know what the future will look like if we continue outsourcing everything. It used to be that we outsource primary and secondary sector activies so that we could expand tertiary industries. What are we replacing the outsourced jobs with now?
We had British SaaS supplier and all the time I have talked with Bangalore-based people. They had to work in night I suppose…
Source: lived in India for a year.
That's a pain management are willing to inflict upon /you/
CTOs are aware of all the tradeoffs
Timezone matters
I have been working from home to various degrees since 1997 or so and I go in more when I need more work to do and work from home more when I am super busy with coding stuff or similar that can be done better and faster from home.
But yeah going to office to sit in meetings with of people in other offices is silly.
The era of American developer exceptionalism is over.
Talent abroad has access to the same tools, education, and increasingly, network. American engineers will be replaced wholesale with overseas engineers that cost a fraction of American labor.
You can hire talented React engineers for $50k that will work harder than their American counterparts.
It's not just React. Overseas markets have DevOps, SREs, embedded, systems engineers, you name it.
For years Americans joked that overseas labor was subpar. It's not, or at least it isn't in today's world.
Jobs that have a high 0-1 component will still be in the US but jobs that are more 1-n may be offshored.
Capital
The U.S. also has the largest useful single market in the world (the EU is broken up across many languages/cultures, China is isolated so you can’t really expand out).
The U.S. is actively working to destroy several of those planks right now.
Even the capital plank, which superficially looks strong, is being hurt by the government picking winners and choosers. If the current govt bets don’t turn out to be the right ones we’re looking at an ugly, probably tax payer funded (OpenAI has already hinted at this) collapse.
Are you measuring by where the work is done, or where the people signing their names on it live? Two different things.
It used to be (since at least mid last century) and 0-1 and 1-n jobs were focused here. The world becoming smaller allowed a lot of 1-n jobs to move abroad. But we kept 0-1 jobs here.
That used to be the situation when the country brought people from around the world to be educated and then start business here. And historical precedent allowed us to continue thise advantages by having a reputation for it and continuing to support it. Our country for some reason now has decided it no longer wants to take the actions that fill the pipeline for 0-1 innovation.
And the world just like it took over 1-n is going to take over 0-1.
Why you would choose catalyze that change as an American, I have no idea.
I think there are people that generally believe that there is magic dust that says it can only happen on US soil instead of there being structural actions taken to enable it.
We will all very quickly learn that 0-1 can be anywhere that 1-n is.
Indeed, however other business roles have a significant physical presence or face to face component. Sales & marketing, legal, HR, and significant parts of operations and admin have physical presence requirements in most businesses. I would expect finance/accounting to be vulnerable to offshoring, though.
If all the high earners are off shore, may as well sell to them with an off shore sales team.
Don't need local marketers if the market isn't local anymore.
What's the logic here other than "coders are the top tier of the labor market" arrogance?
So yeah it’s not surprising that jobs are going offshore.
3,00,00,000 instead of 30,000,000
Older than western civilization probably, but does take some getting used too.
And developer costs had gotten so crazy, this was the perfect storm.
Everything I look into as far as 2nd career goes has a very high barrier to entry and then there's the ever-present ageism barrier to fight, too.
I'm fortunate in that I have enough money to maybe just be retired, but most of you aren't anywhere close to being that financially independent. It's going to be ugly.
I knew for years that the offshoring blitz would finally reach critical mass and I was correct. Now it is an economic conflagration.
Just outright insane.
1. It enables them to live in lower cost of living cities. This makes them more competitive relative to outsourcing because a lower wage in a cheaper city goes farther.
2. It opens up the job pool. If you work remote, you can work at any company that takes remote workers regardless of where you live.
3. It reduces the cost of switching jobs. Many people are stuck in jobs they don't want because there are few other local opportunities and switching jobs means uprooting and moving. For a single 20-something in an apartment, that doesn't sound so bad. But once you have a partner with their own career, kids with meaningful friendships, a mortgage, etc. then moving can be extremely disruptive.
In general, more job flexibility increases the efficiency of the job market for employees.
It increases the efficiency of the market as a whole, but that's not the same as saying that first world software engineers (already highly paid and previously protected from foreign competition) would be better off.
2. Correct. Given that the majority of SW jobs, especially the highest paying ones, were located in the U.S. this is a net benefit to anyone living outside the U.S. even before you take cost into consideration. More American jobs opened up to a Londoner than global jobs opened up to someone living in SF.
3. Efficiency approximately = lower costs. In this case costs = developer salaries.
So you’re right. We got more efficient. We reduced the average cost of developer salaries per job. Since very few people are willing to take a pay cut this means jobs are moving/will move to places where people are willing to work for less.
As someone who is Indian and frequently visits the sub continent (writing this from a suburb in Delhi) I can categorically tell you that no one actively wants to live in the cheapest Indian cities (just left my family’s home city which falls into this bracket).
I’m not sure if you’ve travelled much around the sub continent but I’d say you’re quite badly romanticising it. Yes we have our own culture which is different to that of the USA but, as with all things, there are A Lot of aspects of the culture here which are not admirable.
Sorry to burst your bubble but, I love living in my T3 city I was born in.
Don't talk for 1.4 billion people.
Thanks.
Some may accept a significantly lower pay (to go such a long way), but many wouldn't.
Overall my observation is that costs of living doesn't proportionally follow compensation. The far stretched example is how offshore staff often live in countries with costs of living at about a fifth, earning a third of their counterparts in the U.S or other top paying countries
Of course for skilled jobs perfectly doable remote such as software engineers.
I may be biased by the fact it also makes sense, a worker understands the value provided to the business is more or less equal, and since we live in a market society, why wouldn't it be expected to earn the same. In effect we don't earn the same no matter the location, but it is somewhere between that and aligned to location comp.
that covers more bases
Neither generalization works for ALL cases but hand wavey claims of some ism is small comfort to those of us who've seen the results more than once.
And I've worked with excellent offshored workers as well, but that doesn't make claims to the contrary invalid.
You're not wrong in that companies are looking to hire in cheaper geographies but I think the remote aspect is just a small part of it. Another part is that SV comp has shot through the roof because RSUs. There are also arguably more and better people available in the cheaper geographies.
But it's not a zero sum game and there are still a lot of tech jobs in North America. AI hasn't reduced that total number of jobs.
Here’s the thing though. People have been trying to outsource software development since the late 90s. Every time I’ve been around offshoring efforts wherever they were implemented, a few years later onshoring would happen again. It turns out time zones, thick Indian accents, and poor quality control have been and still are major obstacles to overcome.
High pay has been a mixed blessing for the tech field. For every aspiring top mathematician or physicist who’s been tempted by the pay and relevant new problems, I often feel like we’ve gotten 10x as many people who would otherwise have been uninspired doctors and lawyers or top business majors.
The remainder of the talent tends to struggle with some of the outsourced work, but with AI they can now give a semblance of competence.
In the UK a major retailer, Mark and Spencer got hacked after outsourcing work to India. They couldn't fulfill orders online for months, and they are now reducing the amount of work they outsource to India.
We will see something similar happen to other companies in a year or two, but until then we just have to tighten our belts and hope we don't get layed off before then.
In those locations?
Based on sheer CS grad numbers why wouldn't companies just shift their r& operations there then?
Does sound more like correllation than causation. Was there evidence that the Indian devs made the mistakes that led to the hack or was it just the good old 'let's fall back on racism to avoid blame' by management?
Talented workers get talented pay -- a fact many company's and execs don't like.
It has very little to do with their literal position on earth in relation to a company's real estate foot print.
Workers need to be more intelligent and what was that word you used in your comment... "collective."
The U.S. managerial class has been GORGING off worker's labor for decades and workers are about to have nothing to show for it.
> It has very little to do with their literal position on earth in relation to a company's real estate foot print.
Which is why they will happily pay for talented labor in other positions on earth.
Which to be clear: is not happening.
They're buying very low cost labor and are hoping to power through it for some sweet juicy numbers.
It wasn't some digital nomad work in my jammies lifestyle thing. It gets tiresome to hear: "see it's all your fault"
Additionally, companies can’t just hire individuals in other countries. They have to set up business entities and that costs significant money to do. It’s why they mostly work with outsourcing companies, who often do have offices where these people come in and work.
I guess folks really did think that location had nothing to do with Silicon Valley paying 4x or more the worldwide average. That there was simply no talent anywhere in the world who could even compete at their level. No project managers anywhere who could do the job for less than $200k/yr.
One the dam broke and it was clear that remote work could be productive it simply opened up a rather insular industry to extreme worldwide competition. Far more smart and talented folks out there in the world than many anticipated.
The hubris was (and is) crazy to me.
I think this is going to be a new golden age kf innovation. Lot of senior engineers capable of pencil whipping microservice infrastructure paired with industry experience means startup mill goes brrrr
One thing also contradicting the "AI can do it" argument, is that a business's playbook is to rather expand the work force in order to multiply the effect of technology. Yet they lay off in waves.
There is no dissonance, just a disguise: Several big tech companies in the US cut their workforce, in the US, while expanding it in countries where talent is cheaper.
Paradoxally, junior folks have it even worse. It has become very difficult to land a job without experience, again, in the US. It all makes sense, if you replace US based senior staff with Junior staff on different time zone, and having a different culture, you are left with nobody to mentor and supervise junior so staff.
I still can't explain how ending up with more Junior staff, offshore, less senior staff and little to no Junior staff locally will pay off in the long term.
I guess I will figure that out, but for now that's one piece of the puzzle I can only call an "economic downturn" outlook.
Salaries for tech are 2x what they should be just due to housing costs.
Seattle used to be where bay area companies relocated teams to because the cost of living here and salary expectations where 2/3rds the bay area, but that ship long since sailed.
Asinine short sighted city councils will be the death of all our jobs and also the death of the only remaining industry that America is competitive in on a large scale.
All the while management is breathing down your neck and asking 'why isn't it ready yet'.
Once the thing is shipped, then all the important people come out of the woodwork, who were surely there all along, 'supporting' you from behind the scenes, there are photo ops and important people shaking hands. If they feel particularly charitable, then you might get a seat at the table. There's talk of spinning up a team around the product, and people fall over each other to get to lead it.
But the thing is, most likely they don't need your expertise any more, not really, once everything works, you don't really have a negotiating position as a dev. They get some cheap juniors to fix the bugs and add the missing feature niggles - hiring 3 juniors might not even be cheaper, the point is management does not have to depend on you, they can play their human resource games.
'But only I can fix that complex race condition, that popped up half a year after development' - well if it was good enough with the bug for people not to notice it for half a year, it's going to be good enough for another half, until the new devs can fix it.
This applies to ambitious feature requests as well - if the code's good enough that the contract was signed, the business requirement was met, they can just kick the can down the road until they can fix it.
Because in any country with poor worker protections, the outcome is layoffs regardless.
AI succeeds? Layoffs of unneeded roles.
AI fails? Layoffs to cut expenditure to make up for the written-off expenditure.
In the UK, if AI makes a well-established employee redundant, the employee is entitled to redundancy pay. And if the company fucks up and overspends on chasing a ridiculous Macguffin they can't just fire people without making them formally redundant.
The damage that is going to be done in the USA if the AI bubble bursts is going to be generational.
AMZN for example overhired in various functions because it expected demand that never materialised. Admitting that is bad for the share price, but writing some woo about "AI and agility" will convince at least some investors to keep the faith.
Not a single mention of jobs being moved to India including tens of billions of investments in new offices.
Backing links from a quick search earlier this week when an obviously Indian HNer tried to deny this was really happening:
Microsoft announces US $3bn investment over two years in India https://news.microsoft.com/en-in/microsoft-announces-us-3bn-... (Jan 2025)
Google announces $15B investment in AI hub in India https://apnews.com/article/google-artificial-intelligence-vi... (3 weeks ago)
[Indian] ex-Accenture CTO named Google Cloud’s Chief Product https://www.hindustantimes.com/trending/us/who-is-karthik-na... (last week) (a lot of people speculate they named an Indian Accenture guy to move as much as possible to India)
Big Tech giants defy US-India trade tensions, record strongest 12-month headcount growth in India in 3 years https://www.moneycontrol.com/technology/big-tech-giants-defy... (September)
https://www.reuters.com/world/india/openai-launch-first-indi...
https://www.anthropic.com/news/expanding-global-operations-t...
and so on. Something very crazy is going on.
NOTE: I am not American and this doesn't affect me directly.
It has so become huge there, that is getting to similar size as the traditional call centre industry, hundreds of thousand of people work on curating data for model training.
Google hiring a senior lead who can scale low skill business processing massively is just inline with that.
Any compute investment is largely local . Internet and Electricity is expensive and erratic, there is red tape, loads of import duties, there are dozens of cheaper places for cheap data centers.
All this to say it is not the kind of outsourcing you think it is.
—-
There is a some amount of high tech outsourcing happening, those are driven by challenges in getting even a business visa in last 5 years.
those numbers are quite small in aggregate won’t be news worthy.
India simply does not have that kind of high quality talent pool .
The education system is both expensive and very poor. There is shortage of qualified teachers, even bigger shortage of good ones. Students and parents just want to get a “degree” /maximize scores to get a job, There is little interest to learn.
Then why are they giving one year of free accounts for developers to the whole country? Remember they have about one million CS graduates every year. Do you see the scale of costs?
The thesis here is that current gen tools should enable 2 people do the work of 10 and LLM models get paid the budget of 2-3 devs.
The outsourcing org comes out ahead with spending only 70% as before (salary of remaining devs will naturally increase)
OpenAI et al captures 30% value of the IT outsourcing sector. There is no free lunch after all.
——
India is by far the largest market for this. 1yr free is same reason every VC funded company discounts their product or starts with free, just to get adoption.
Nobody is going back once you get them to change.
——
The number of CS “grads” are not a useful metric for India.
The industry shifted to hiring other engineering streams to any grads with aptitude to learn a long while back.
The vast majority of them don’t have any programming skills, don’t have critical thinking skills, are poor at communication.
They are unemployable. Don’t take it from me, NASSCOM says this too.
The degrees are largely from mills that are private education “trusts” charge up to $80k-$100k (med degrees go even higher) promising jobs but don’t teach much.
Not that I believe Trump actually cares about US jobs, let alone thinks strategically about the importance of a strong software sector, but you might expect him to at least do another mafia-style shakedown of the companies outsourcing jobs. Heck, you might think he'd even care about all the lost tax revenue, by having developer salaries going to India rather than staying here.
Having dealt with A LOT of Accenture “devs”, how do I leverage the barn and then some to short Google!
> Those expenditures may be approaching $1 trillion for 2025, while AI revenue—which would be used to pay for the use of AI infrastructure to run the software—will not exceed $30 billion this year
While it's clear that the author is summing up the spending from the big players, it's not clear to me that their math is right for revenue. Yes, OpenAI, Anthropic, Thinking Machines, SSI, etc. have pretty limited direct revenue (including zero!).
But this comparison assumes no revenue growth for other top computing users. Some companies are certainly saving money on some tasks and increasing revenue, particularly in fields like customer support. See the confusing figure in section 5 of https://hai.stanford.edu/ai-index/2025-ai-index-report/econo... .
That chart is by number of respondents and not weighted by revenue. Like the MIT study, it would not be surprising that "just pipe this to an LLM" isn't enough for most fields or companies. But a few have likely made material improvements.
10% of respondents saying they've seen a >10% revenue gain could be substantial, if they're bigger firms with high leverage in computing.
Edit to add: the comparison also makes a classic "GDP vs market cap" style mistake. Capital expenditure has multiple years of useful life. Revenue is annual. You'd want to compare depreciation vs revenue.
1. How will tangible assets generate profit net of near term capex requirements and interest on debt?
2. Why wouldn't payroll shrink as a result of the increased AI capabilities emerging from the capex spend?
3. If AI lives up to the hype & given recent news that public backstops are being requested, why shouldn't the US quasi-nationalize cash strapped players and distribute equity to every American?
4. As NVDA and AAPL local models and local compute eat into utility and base automation business, how do edge players maintain profitability without pricing capabilities well beyond the affordability of SMBs and individuals?
OTOH, if it is only dreams of AI, manifested as AI spending, or CEOs laying people off thinking that AI will soon (even if not today) be capable of backfilling them, then this may well backfire, and will be "reversed" if demand is less than forecasted and/or job-replacing AGI doesn't materialize, and all we get is productivity tools, useful mostly for a narrow band of jobs.
Incidentally, I think Karpathy might be right that there is pretty much only one job that seems it actually could be replaced by AI today, at least potentially, which is call center tech support, or customer support, staff, who are dealing with a narrow domain and just reading off a script.
The spending-revenue gap is real. Hyperscalers are projected to spend $300-550B on AI infrastructure in 2025[1] while generative AI revenue won't exceed $30-40B [2]. Amazon's capex jumped from $48B in 2023 to $84B in 2024 to a projected $100B+ in 2025[3], that's capital intensity doubling from historical norms of 11-16% to over 22% [4].
But here's what the article misses: this isn't financial desperation. When Amazon's CEO announces 14,000 layoffs and explicitly states that AI will enable "fewer people doing some jobs"[5], he's revealing the strategic logic — show me the incentives and I'll show you the outcome. Companies aren't cutting jobs despite AI spending; they're cutting jobs because they know AI spending will pay off.
To be clear, the article treats the spending-revenue gap as evidence of irrationality. But infrastructure buildouts always precede revenue: railroads looked insane before they transformed commerce, electricity grids consumed massive capital before delivering returns, the internet required enormous infrastructure investment before creating trillion-dollar companies.
What's different now is companies are pulling the future forward. If we take this article at face value which I can appreciate is a BIG “if” then AI is already automating 25% of tasks and delivering 10-55% productivity gains[6] so they're not waiting for AI to replace jobs organically. They're cutting headcount now to fund the infrastructure that will make those cuts permanent.
More broadly, this is rational capital reallocation in a winner-take-all race. Companies that don't build AI infrastructure won't gradually decline, they'll lose competitive positioning entirely. That's why Meta is using off-balance-sheet financing for a $27B data center[7], why Oracle is borrowing $25B annually despite already carrying 450% debt-to-equity [8]. They're all-in because the alternative is obsolescence.
The real story isn't "spending causes cuts" it's that AI infrastructure commoditizes human expertise, the complement to compute infrastructure. Companies are trading labor costs for compute infrastructure because they've correctly identified compute as the new moat. The job cuts aren't the price of spending on AI; they're the business model shift that AI enables.
The article is right that we're not seeing mass AI job replacement yet. But the job cuts are happening in anticipation of replacement, not as an unfortunate side effect of spending. That's not desperation just business strategy.
-- 1.(Morgan Stanley: https://www.datacenterdynamics.com/en/news/morgan-stanley-hy...) 2. (Grand View Research: https://www.grandviewresearch.com/industry-analysis/generati...) 3. (CNBC: https://www.cnbc.com/2025/02/06/amazon-expects-to-spend-100-...) 4. (Cerno Capital: https://cernocapital.com/accounting-for-ai-financial-account...) 5. (CNBC: https://www.cnbc.com/2025/10/28/amazon-layoffs-corporate-wor...) 6. (PwC: https://www.pwc.com/gx/en/issues/artificial-intelligence/ai-...) 7. (Fortune: https://fortune.com/2025/10/31/metas-27-billion-bet-turns-ai...) 8. (The Register: https://www.theregister.com/2025/09/29/oracle_ai_debt/)
They think they know.
Likewise many tasks I used to do with Java, .NET, Node.js, have been replaced by low code/no code tools with agentic orchestration.
Thinking that AI isn't replacing jobs is wishful thinking.
So either their business is a dead end, the inefficiency is at the management layer, or AI isn’t actually making workers more efficient.
Instead we're still talking about cost cutting. Seems the market is not focused on investing outside the AI moonshot gamble.
I wonder if that's true; I'm not in the US myself so I can't exactly just go have a drink in a place with lots of devs to try to find out.
The reasons are somewhat obvious:
* World economy in general and the US in particular is a rollercoaster, with the current administration being apparently dead set on flip flopping on every decision it makes, and always making extreme decisions. That's not a good time to invest. Hiring juniors is investing.
* AI not necessarily replacing the jobs, but that's not actually relevant: AI has already torpedoed the general notion that 'if you have investor money you gotta spend just hire a bunch of folks; # of employees is the primary yardstick to check company size / success', whether AI works or not. If the boss tells a VP to 'use more AI to get a handle on hiring practices', then they're going to stop hiring juniors because it looks like you're outright refusing a direct order if you hire a bunch. Even if AI 'employees' are useless, you are strongly incentivized not to hire juniors in such an environment. Juniors both lost the job opportunities stemming from companies just hiring folks because they have enough cash to do it and no good idea on where to spend it, and the downside of looking like you aren't on the AI hypetrain, if you hire juniors.
* There's evidently been a rather massive push in particular during the previous administration to get folks from dead end jobs into IT, so there's now an overwhelming amount of junior devs, and many of them didn't naturally get drawn to the profession; they were told it's an easy way to get a steady job.
* Even though there's some downturn/uncertainty, seniors/mediors aren't being fired because companies still remember how expensive and difficult it was to (re)hire dev teams post COVID. But that just makes the market for juniors even worse and makes it harder to hold out hope. When everybody is getting fired, then once the economy is in better shape you stand a good chance. But that's not happening; those mediors and seniors are continuing to get job experience whilst the juniors aren't.
Those 4 combined: Sure, yeah, I can imagine your average junior dev's odds to get hired are at this point well into the single digits. But is that actually true?
The other factor is, will revenues really stay the same for companies once we have AGI / super intelligence? It seems value will not accrue to the companies that are in chill mode.
laweijfmvo•3h ago
FjordWarden•3h ago
reeredfdfdf•2h ago
Even if generative AI lives up to its hype, with current US administration there's no way America is going to lead the race for long. There's just not enough energy available, when those in power oppose developing many of the energy projects that make most economical sense.
epicureanideal•2h ago
n3t•2h ago
Assuming that GPUs power efficiency will increase, the same will be true about them.
laweijfmvo•1h ago
tryauuum•2h ago
right now I see even old GPUs like V100 are still popular. Maybe the old GPUs will shift to the countries with cheap electricity?