AI: “Developers, Developers, Developers!”
...AI will make Developers far more productive, and make us all Developers too
Like clockwork, it’s that time again, calling for all ‘Developers, Developers, Developers’ again. Tech is accelerating the need for software Developers. And this time, the AI Tech Wave is making Developers far more productive. Looking back, we’re likely to find that AI makes every Developer far more productive. While making us all ‘Developers’ just by using regular language. And it’s all happening at an accelerating pace. Let me explain.
Nine months after OpenAI’s ‘ChatGPT Moment’, the media is focused on the surge in demand and salaries for AI developers. The WSJ highlights the exploding AI developer boom, in a piece titled “The $900,000 AI Job is here”:
“American companies are in the midst of an AI recruiting frenzy, and some are wiling to pay salaries approaching seven figures to hire top talent.”
Firms in industries such as entertainment and manufacturing are racing to seize on the potential of artificial intelligence by wooing data scientists, machine-learning specialists and other practitioners skilled at deploying the technology.”
Of course, as we’ve discussed already, the world has woken up to the next big Tech wave that is LLM AI and Generative AI, and the global ‘Gold Rush’ has begun. We’ve discussed the epic demand for Nvidia’s $30,000/unit plus high-end H100 GPU chips, needed in clumps of cloud clusters by the tens of thousands. And Chinese companies are bidding billions in GPU infrastructure ahead of accelerating US export curbs.
But nothing happens with the chips and gobs of cloud compute that needs tens and hundreds of billions in investment by companies large and small, without another critical ingredient: Developers. Without GPU chips, and Developers to build things with them, the ‘A’ and ‘I’ in ‘AI’ are just two letters in the alphabet.
As Microsoft’s former early CEO Steve Ballmer made famous in the 1990s with his full-throated chants in front of thousands for, “Developers, Developers, Developers!” He was spot on in hindsight, and is enjoying the rewards as a Microsoft shareholder to this day, having surpassed the Meta and Google founders for now. The iconic video is worth watching even today, to take in the raw energy and enthusiasm.
And the chants will echo on for some years to come with the AI wave. It’s notable that Microsoft again is finding a sweet spot for AI technology with Copilot Github. It’s AI tools for Developers. They’re finding that even the early LLM AI tools are boosting developer productivity by meaningful numbers.
This despite the irony that Foundation LLM AI ALSO makes us all programmers, as Nvidia co-founder and CEO Jensen Huang presciently said all the way back in 2017, that AI was eating software eating the world. The demand for AI developers is on, just as we saw the demand for mobile web developers after the Apple iPhone introduction in 2007:
“A gold rush for iPhone and other smartphone application developers is in the works, with U.S. revenues from smartphone apps expected to increase more than 10 times through 2013, to $4.2 billion.”
And of course, a similar wave for cloud computing developers as well in that decade, and around every major tech innovation.
The AI wave is seeing a broader and deeper demand for developer talent as highlighted by McKinsey in it’s latest report around AI driven workforce changes, as Fortune highlights here:
“A comprehensive new report from consulting giant McKinsey tries to quantify these impending changes by examining how the mix of jobs might change over time. Crucially, McKinsey’s research reaches a point of view that has been uncommon so far in the discourse—that A.I. will not wipe out jobs in the long term. Even though the research in question “cannot definitively rule out job losses, at least in the short term.” The sectors most exposed to generative A.I. could still add jobs through 2030 but at a slower pace than previously anticipated, the report concludes.”
“Instead, A.I. will either change the way certain jobs are done or create an opportunity for employees in lower-paying jobs to move into high-paying positions, provided they receive adequate training. McKinsey’s report estimates 12 million people will switch careers by 2030, 25% more than it projected just two years ago. Workers will change careers owing to a variety of factors. Though some may see their jobs disappear, others will gravitate toward higher paying fields, or ones where their skills are in greater demand.“
As I highlighted in an earlier piece, although one of the top concerns by regulators is around possible job losses due to AI, the counter-intuitive force through most tech waves has been a net gain of jobs around revamped & re-imagined products and services over time. This comes across in many studies, with this piece by the St. Louis Federal Reserve and its representative conclusion:
“The tech-sector industries have been growing rapidly over the past several years and have the capacity to help bolster economic growth going forward. While the tech sector is small in size, it plays a critical role in driving innovation and productivity growth, and the sector generates disproportionate economic spillovers. The tech workforce is also one of the most highly skilled labor pools in the economy, and high demand for tech workers has been a key driver of wage growth.”
We’re going to need to think about the need for developers and talents far more expansively than previous cycles, given the range of changes potentially involved across industries. Especially since this time around, globalization is being redefined vis a vis China and others on national security grounds. As Axios notes in this piece “Experts push Congress for more high skilled immigrants to compete with China”:
“More than five dozen experts, including former national security officials, are asking the House China Select Committee to address "immigration bottlenecks" for international science and engineering graduate students and workers, according to a copy of a letter viewed by Axios.”
“Why it matters: Both U.S. and Chinese leaders have highlighted global science and engineering talent as key to national security and economic growth.”
“The letter's authors warn a talent gap is emerging between the two countries as China heavily invests in training advanced science and tech talent.”
"Much of this talent will be working in Pentagon-identified critical technology areas — such as AI, biotechnology, hypersonics, and space," the letter states.”
“The big picture: Artificial intelligence development, the semiconductor industry and the defense workforce in the U.S. hinge on international STEM talent.”
“About 40% of high-skilled semiconductor workers in the U.S. were born abroad and international students make up about two-thirds of electrical engineering and computer science graduate students, per a 2020 report from Georgetown University's Center for Security and Emerging Technology.”
“A report last year from the Institute for Progress found 82% of "companies in the defense industrial base report that it is difficult to find qualified STEM workers" and 50% of those who hold advanced STEM degrees and work in the defense industrial base were born abroad.”
“The Reagan Institute's National Security Innovation Base Report Card earlier this year gave the U.S. a grade of D+ for the state of its talent base and pipeline, citing an aging domestic defense workforce and visa hurdles for foreign talent.”
We need only to look at how our tech industries have been staffed to date, as this Brookings report highlights:
“With AI becoming more ubiquitous in almost every sector, it is outpacing the current skills of workers and requiring considerable adaptation on the part of industrial-era employees.”
“Currently, 45% of STEM employees in the U.S. with a doctoral degree are foreign-born, and the backlash against immigration could pose barriers to retaining and growing that talent pool.”
“The U.S. must prioritize effective implementation of the CHIPS and Science Act, boosting domestic manufacturing capabilities, better workforce development and STEM education, lifelong learning, reasonable immigration policies, and effective management of geopolitical tensions.”
It’s anecdotally important to note that Nvidia, the thirty year ‘over night success’, and the most recent trillion dollar US company whose GPU chips enable and drive the current LLM AI wave, was co-founded and is led by Jensen Huang, born in Taiwan. He moved to the US as a child, ‘earning engineering degrees at Oregon State University and Stanford University’.
And as the Aspen Institute highlighted the broader urgency in a recent report:
“High-skill immigration has been in political stalemate for decades, with both parties agreeing it is valuable to the United States, but holding the issue hostage to immigration reforms with less bipartisan consensus. This approach was always questionable, but now that it is clear how important STEM talent is for technological competition with China, further inaction is unconscionable. Although executive authority can make some changes, congressional action is required to achieve reforms of the scale necessary to meet the challenge at hand.”
As I highlighted in a recent piece on China and our technology industry, the scale of talent needed to develop innovative products and services by companies like Apple and others, involve tens of millions spanning areas and supply chains far beyond traditional software development alone.
Illustrative of the coming competition for talent is the move by Canada to siphon off tech talent to Canada instead of the US:
“Ottawa is trying to attract more high-skilled workers by launching a program in mid-July to allow about 10,000 H-1B visa holders in the United States to work in Canada.”
Canada isn’t alone recognizing the need for tech talent. Other countries are also in the global hunt.
So the current stories of booming demand and salaries for AI developers and ‘prompt engineers’ kicked off by OpenAI’s ChatGPT and other AI innovations, are just the early waves in shifting skills needed for the new tasks at hand.
These waves will ebb and flow. And are just the beginning of a cambrian explosion of newly evolving opportunities driven by AI. As Goldman Sachs outlined in its recent report, the world economy will likely see trillions in net growth over the next decade.
So while many efforts will fail, the ones that succeed will have a net positive impact on the global economy over time. And we’re likely going to need developers at a whole different scale this time around. As almost every industry is reshaped and refitted with this new way of doing software. Developers broadly defined, with a wide array of skills and backgrounds, from anywhere and everywhere. Stay tuned.
(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here).