I think you are on to something maybe. I also think there is a key part where Microsoft and others would hire people so nobody would. I know cases where people were hired and stayed on irrelevant or useless projects for years. Because of non compete agreements this means a good professional would stay few years out of the hands of the competition.

I think now LLMs might play a part of those dismissals but also I think those companies are embracing for thin cows season.

The record profits and etc are the last few for a while I am guessing. My guess they might have up to a year of positive numbers as consequence of deals and layoffs up to this moment.

I think at some point it will be clearer what are the real productivity gains of LLMs. My opinion is that there is a gain but we are already on the phase where there is a deceleration on the improvements and the costs have not yet caught up. The reason for this is the frequent change in the reporting of results. Now they hide the models, they hide the harnesses, they hide the results. They would not be doing that if they were 100% confident it was working perfectly. Also they have been putting too much effort on blocking other initiatives by hiring important researchers with no clear proposition on what they will be doing. One might argue that when you hire Karpathy you never know what he will might be doing anyway, but I digress. We also see some of the huge investment funds starting to switch strategies.

Unless there is no breakthrough, we might see LLMs results in a couple of years. The company I work for and others from friends I know have all started restrictions on costs. Some even started hiring people back.

My prediction is that the low AI cost per token era will end very soon when investors realise that the market is broken and they want their money back for leverage themselves or other businesses.

I even think this is why Elon Musk is merging all his companies. He might making himself artificially richer, but I think he is focusing his efforts to smart weapons and robots.

I think there will no way back to the inflation of people as in 2020/2021 but probably we are going back to early 2010s number.