As of today, AI led productivity gain in software development estimates are (at best) 25% to 50% as measured on an end to end product basis (prototyping is much much faster now but finished product requires a lot more human work).

A 10x or 100x productivity leap could happen (I believe it will happen, see below) but it has not happened _yet_.

The _current_ challenge posed by AI:

a) server/memory and hardware prices are way up (4-5x in a year for servers) driven by the monster AI data center build out.

b) AI token spending per engineer is way up (those productivity gains are costly!)

c) Hosting open weight models needs expensive GPUs.

So we have revenue growth but costs have grown much much faster.

Layered on top of that is the geopolitical uncertainty. As one example, the Middle East is a major market and the prolonged war is not good.

The US stock market is in a monster bubble and it is a mistake to think of stock prices as indicative of future prosperity - the GFC of 2008-9, dotcom bust of 2001-2 as wall as the 1980s Japan bubble all demonstrate that point.

Now the 10x productivity leap in software. I believe it is coming because of what is happening in the mathematics world. The crucial link is auto-formalization, or formal verification of code. Mathematics theorems are formalized in Lean and proofs are verified by the Lean verifier - Lean is a programming language.

LLMs do not verify the proof, they generate it to be verified by the Lean verifier and once you have the advanced reasoning capable LLM and Lean verifier in a feedback loop and give plenty of compute, magic happens.

That formal automated verification mechanism is coming to LLM generated software. That is the basis of the 10x or 100x prediction. The analogy is handloom weaving vs powerful machine looms of code.

So it is the combination of current data center/AI costs, geopolitical uncertainty and the potential of a 10x or bigger leap in software productivity driven by advances in automatic program verification. These are all challenges to software jobs, and that is why we have called for reinvention internally.