There have been consistent reports of layoffs within Israel's hi-tech sector, largely as a result of economic regression as Israel comes down from what was a banner year of foreign investment in 2021. As with any outlying data point, there has been a regression to the mean which, when coupled with current geopolitical factors, has made it necessary for hi-tech companies to trim some of the fat that was packed on during that window of peak performance.
The trend of layoffs coincides with the boom of generative AI, which appears to have accelerated development --or at least popularity -- of AI technology across the board. The coincidence of these ideas gives rise to a question regarding their overlap: could it be that the utilization of more advanced AI technology could mitigate the downsizing effect as the Israeli hi-tech sector regresses?
Some might assume that in certain cases, Generative AI might be able to just replace workers that the technology makes redundant, but in fact, according to area VP and head of sales at Salesforce Itai Margalit, allowing those workers to use AI may enable increased productivity, which in turn enables increased profits altogether.
“Market competition is fierce. Competitors won’t go away, and by being able to do things more efficiently in a more automated and quicker way, that does not mean that you need less people; it means that you will be able to do more with what you have” he said.
Margalit expressed an idea that has been a recurring mantra among experts during the rapid advancement of AI technology: It’s unlikely that AI is going to replace anyone outright any time soon, but it will certainly give those who use it a significant leg up relative to those who don’t.
“I don't think AI is necessarily a direct counter to the current [layoff] situation, but when an organization is efficient and well optimized in their operations, then the capabilities they have during downtimes — as we’re experiencing today — are far greater than those that are not using these capabilities,” he said.
He went on to note that whether a company finds itself in harder or easier times, using the right tools is a surefire way to guarantee an advantage.
“During better times, organizations using these types of technologies were able to grow faster, and growth before the current period was the Holy Grail, the most important thing,” he said. “Now, efficiency or profitability is the most important thing. So using this tech becomes much more profitable, because you will need less resources — not in a sense of laying off people but actually less resources to do the same amount of work that you have been doing before — and you’ll still be able to show growth even when you are in a downtime period.”
How will AI change development?
Could using AI within your company’s workflow change its workforce composition? Oleg Gohman, CTO at CloudZone, elaborated on how utilizing AI for consumer-facing processes can alter the amount of workers required to handle them in the first place.
“Using AI in order to generate technical answers to customer tickets means you need less people to support your customers,” he said. “It allows you to shorten the time to resolution and time to answer and, of course, have a direct impact on the size of the required team.”
That said, he explained, it’s likely that AI integration will result in larger team size when it comes to backend processes, because of the increased development potential that AI presents.
"It's just going to be part of [every developer’s] toolset. There will be a similar composition of people in the near future, but they will all be able to get their AI assistants to be able to make them more productive and write higher quality code.”
Dori Exterman, chief evangelist at Incredibuild
“In the internal development team, we are not looking to reduce the number of employees or to minimize the capacity of the team. We are looking to add additional features for our customers,” Gohman said, noting that because of the increased opportunity to add features, which requires human labor, the ultimate size of the team is unlikely to be impacted.
Okay, but how will AI change developers?
While the size of development teams may not be so affected by AI’s integration into the dev workflow, Dori Exterman, chief evangelist at IncrediBuild, pointed out that it may very well alter the makeup of what a developer looks like in the first place.
“Maybe today you have developers who specifically work with AI in order to generate code, but the way it’s spreading throughout the industry, soon that's going to be every developer,” he said. "It's just going to be part of [every developer’s] toolset. There will be a similar composition of people in the near future, but they will all be able to get their AI assistants to be able to make them more productive and write higher quality code,” he said.
As generative code-writing AI becomes a central pillar of the development process, Exterman noted, it could give rise to the need for a new skill from those who work with it: the ability to clearly explain to it exactly what it needs to develop, and the awareness to make necessary changes where it inevitably slips up.
“I think that there will still be developers writing code. It's not something that's going to disappear, but I think that they will write less code, they will need to be more familiar with understanding what exactly they're asking the AI to write for them, and how to kind of glue together the pieces of code that they will generate,” he said.
“It will require a lot of understanding of requirements and understanding of how to break problems and how to communicate problems in a way that can allow you to get the benefits that an AI can give you; that's part of the new kind of skill set that people will need to have.”
Scissors are great, but don’t run with them
It's important to note that, like any tool, there should be some wariness in taking AI and running with it blindly. There are potential legal ramifications for the use of generative AI in certain cases, which could lead to copyright issues or the incorporation of false or biased information in resulting products.
Adv. Eldar Sivan, an attorney specializing in commercial law, intellectual property and hi-tech, noted that when working with generative AI platforms such as ChatGPT that process vast amounts of data in order to learn how to create “new” content, there is always a risk that the product it outputs may contain something legally problematic.
“ChatGPT gives you information, but you don't actually know if it is true or false [based purely on what it creates]. You don't know where it comes from. You don't know whether it contains IP or not, or if it infringes copyright,” he said.
The solution for this is to push for advancement in developing AI explainability and transparency so that any outputs from a generative AI platform can be dissected to find traces of copyright, bias or misinformation. In the meantime, AI users should be cautious and careful to review any and all information produced by generative AI to ensure that it is genuine, true, and original.
“AI is great, I use AI personally. But it is not giving you the guarantees that you need as a business owner or as a company, from the legal point of view,” Sivan added. “I think that you should use AI only to give you a first notion or an initial idea, but from there you have to be a professional and do your work as you’ve always done.”