I keep seeing claims that AI has 10Xed the productivity of software engineers.
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Apple hit $5tn last week by announcing they WEREN'T embracing AI. Huh
@ralfmaximus Apple is reportedly using AI internally quite heavily, but their blockbuster quarter was attributable to hardware sales. A little of which might, in turn, be AI-related, but see my comments about Nvidia (success at selling pickaxes during a gold rush isn’t the same thing as the gold rush “working”).
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I keep seeing claims that AI has 10Xed the productivity of software engineers. I’ve seen them here, this week, in fact.
Here’s my question: where’s the software company that has 10Xed their profits using AI?
If these kinds of gains were in reach, why hasn’t Microsoft or Google done it?
@maxleibman @malcircuit Anytime now, just one more prompt
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@Alison @ralfmaximus There were some CRAZY good value MacBook Air sales last year.
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@Alison @ralfmaximus There were some CRAZY good value MacBook Air sales last year.
@maxleibman I grabbed a Mini with all the RAM before RAM went nuts. @ralfmaximus
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Nvidia doesn’t count, by the way. Selling pickaxes during a gold rush doesn’t prove that prospecting pays.
@maxleibman this is a great line
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@maxleibman I grabbed a Mini with all the RAM before RAM went nuts. @ralfmaximus
@Alison @ralfmaximus Nice. I have a friend at work that got an M4 Air with 16 GB of RAM and 512 GB storage on a back-to-school sale for $949. I’m pretty jealous now.
(Not that I have anything to complain about. I got the MacBook Neo and a base-model iPad this spring before the price hikes, so I’m doing ok.)
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I keep seeing claims that AI has 10Xed the productivity of software engineers. I’ve seen them here, this week, in fact.
Here’s my question: where’s the software company that has 10Xed their profits using AI?
If these kinds of gains were in reach, why hasn’t Microsoft or Google done it?
@maxleibman first, the naive counter argument: https://www.fool.com/investing/2026/08/04/amazon-crossed-3-trillion-for-the-first-time-monda/
Google and Amazon massively increasing in value (with Amazon led by AWS) based on big increases in revenue. “Net sales rose 20% year over year to $200.6 billion. Operating income climbed 43% to $27.5 billion, up from $19.2 billion a year earlier.”
The real answer, I think, is under the surface. They’re selling raw compute to the big AI companies. They’re getting rich selling shovels in the gold rush, not mining (AI) gold. Profits are up because of AI, but not because of some amazing efficiency gain. Because OpenAI and Anthropic are paying obscene amounts of money for compute. And the money isn’t coming from end users or customers, but from the investors pouring money into the AI companies.
So not actually disagreeing with you at all. Making the naive counter argument and then debunking it myself.
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I keep seeing claims that AI has 10Xed the productivity of software engineers. I’ve seen them here, this week, in fact.
Here’s my question: where’s the software company that has 10Xed their profits using AI?
If these kinds of gains were in reach, why hasn’t Microsoft or Google done it?
@maxleibman
Exactly, AI is mostly marketing hype no show.I came across this earlier today even.
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@maxleibman first, the naive counter argument: https://www.fool.com/investing/2026/08/04/amazon-crossed-3-trillion-for-the-first-time-monda/
Google and Amazon massively increasing in value (with Amazon led by AWS) based on big increases in revenue. “Net sales rose 20% year over year to $200.6 billion. Operating income climbed 43% to $27.5 billion, up from $19.2 billion a year earlier.”
The real answer, I think, is under the surface. They’re selling raw compute to the big AI companies. They’re getting rich selling shovels in the gold rush, not mining (AI) gold. Profits are up because of AI, but not because of some amazing efficiency gain. Because OpenAI and Anthropic are paying obscene amounts of money for compute. And the money isn’t coming from end users or customers, but from the investors pouring money into the AI companies.
So not actually disagreeing with you at all. Making the naive counter argument and then debunking it myself.
@paco Yep, I think we’re in agreement. I didn’t say it about the cloud providers, but I made the same analogy about Nvidia here:
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I keep seeing claims that AI has 10Xed the productivity of software engineers. I’ve seen them here, this week, in fact.
Here’s my question: where’s the software company that has 10Xed their profits using AI?
If these kinds of gains were in reach, why hasn’t Microsoft or Google done it?
@maxleibman I can answer that: Because the tech is WAY TOO EXPENSIVE for what it can do.
If all the "ai" corps focused on making it EFFICIENT above anything, and stop focusing on slop generation, people could make profit.
The actual results from using something like Code can be quite amazing, but at what cost?
This is not sustainable.
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I keep seeing claims that AI has 10Xed the productivity of software engineers. I’ve seen them here, this week, in fact.
Here’s my question: where’s the software company that has 10Xed their profits using AI?
If these kinds of gains were in reach, why hasn’t Microsoft or Google done it?
It’s the new gold rush… or is it a tulip mania?
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I keep seeing claims that AI has 10Xed the productivity of software engineers. I’ve seen them here, this week, in fact.
Here’s my question: where’s the software company that has 10Xed their profits using AI?
If these kinds of gains were in reach, why hasn’t Microsoft or Google done it?
@maxleibman I've never known engineering output to scale linearly with profit? Outside tiny startups.
At the small side, I expect we'll see a rise in very niche companies that previously may not have been feasible. Those with larger markets will ship faster and probably grow faster than in the past.
The big companies, are already big. eg I can't see AWS S3 suddenly going 10x, they already have the features and now it's mostly adoption and efficiency. Which takes the form of MS/Goog layoffs.
Funny enough, in the middle-tier, I've heard some are actually experiencing some margin erosion because features are suddenly a weak moat...
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I keep seeing claims that AI has 10Xed the productivity of software engineers. I’ve seen them here, this week, in fact.
Here’s my question: where’s the software company that has 10Xed their profits using AI?
If these kinds of gains were in reach, why hasn’t Microsoft or Google done it?
I eagerly await someone arguing that software developer productivity isn't the only factor impacting the profits of a software company, because to do so will be to argue either or both that development is a very minimal part of the value of a software company, or that AI is in aggregate negative for all other productive activity in such companies.
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I keep seeing claims that AI has 10Xed the productivity of software engineers. I’ve seen them here, this week, in fact.
Here’s my question: where’s the software company that has 10Xed their profits using AI?
If these kinds of gains were in reach, why hasn’t Microsoft or Google done it?
@maxleibman We should also see 10x better software or 10x more features.
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@maxleibman We should also see 10x better software or 10x more features.
️We *can* have 10x lines of code!
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@maxleibman I've never known engineering output to scale linearly with profit? Outside tiny startups.
At the small side, I expect we'll see a rise in very niche companies that previously may not have been feasible. Those with larger markets will ship faster and probably grow faster than in the past.
The big companies, are already big. eg I can't see AWS S3 suddenly going 10x, they already have the features and now it's mostly adoption and efficiency. Which takes the form of MS/Goog layoffs.
Funny enough, in the middle-tier, I've heard some are actually experiencing some margin erosion because features are suddenly a weak moat...
@kento Maybe not purely linearly, but they have to move together or it's not happening. You can't deliver 10X the value on the same salary and not affect the profitability of the company.
Unless, of course, either developer productivity is an extremely small contributor to profitability—and it's smaller than most people would assume, especially as you say at the big firms, but it would have to be implausibly small in this case—or AI is in aggregate creating negative impacts everywhere else in the org. Or some combination of both.
(Or, of course, the third possibility: "10X more productive" is true, but "productive" has been ill-defined. Somebody is producing 10X the lines of code but but only about the same economic value they were producing before. But that means 10X is a lie.)
And as you say, this is probably more possible in a small shops, but I'm not hearing about any of them taking off like a rocket, either.
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@kento Maybe not purely linearly, but they have to move together or it's not happening. You can't deliver 10X the value on the same salary and not affect the profitability of the company.
Unless, of course, either developer productivity is an extremely small contributor to profitability—and it's smaller than most people would assume, especially as you say at the big firms, but it would have to be implausibly small in this case—or AI is in aggregate creating negative impacts everywhere else in the org. Or some combination of both.
(Or, of course, the third possibility: "10X more productive" is true, but "productive" has been ill-defined. Somebody is producing 10X the lines of code but but only about the same economic value they were producing before. But that means 10X is a lie.)
And as you say, this is probably more possible in a small shops, but I'm not hearing about any of them taking off like a rocket, either.
@kento I will also confess I may be calling this out too early. The AI coding mania really took off less than a year ago. But the stories need to start showing up at some point, with real numbers from real players.
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I keep seeing claims that AI has 10Xed the productivity of software engineers. I’ve seen them here, this week, in fact.
Here’s my question: where’s the software company that has 10Xed their profits using AI?
If these kinds of gains were in reach, why hasn’t Microsoft or Google done it?
@maxleibman They have. You can achieve 10x productivity with AI, but at about half the quality and 2x the cost (tokens).
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@kento Maybe not purely linearly, but they have to move together or it's not happening. You can't deliver 10X the value on the same salary and not affect the profitability of the company.
Unless, of course, either developer productivity is an extremely small contributor to profitability—and it's smaller than most people would assume, especially as you say at the big firms, but it would have to be implausibly small in this case—or AI is in aggregate creating negative impacts everywhere else in the org. Or some combination of both.
(Or, of course, the third possibility: "10X more productive" is true, but "productive" has been ill-defined. Somebody is producing 10X the lines of code but but only about the same economic value they were producing before. But that means 10X is a lie.)
And as you say, this is probably more possible in a small shops, but I'm not hearing about any of them taking off like a rocket, either.
@maxleibman all this plays out in a competitive ecosystem.
From my perspective, GenAI is just a commodity productivity technology. Whether it's 10x or 0.5%... doesn't really matter.
If two companies are competing and one adopts the productivity technology... their competitors will follow along, getting the same advantage, returning to competing on price. It's table stakes that get passed on to customers as price/feature benefits, not an advantage, nor a profit moat.
(I don't know what the productivity factor is, or bringing an opinion on whether any of this is "good"... it's just an interesting system dynamic to think about)
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I eagerly await someone arguing that software developer productivity isn't the only factor impacting the profits of a software company, because to do so will be to argue either or both that development is a very minimal part of the value of a software company, or that AI is in aggregate negative for all other productive activity in such companies.
@maxleibman I would actually argue that most of the positive impact of AI in my company has been outside of software development.
It's mostly small things like looking for a lost message, trying to figure out what a decision has been, summarising a thousand messages in Slack, and things like that. Sure, I still need to go check it, but at least I know where to look.
Definitely not worth the lunacy surrounding AI at the moment, but my life would be a lot harder if not for it, that's for sure.
