AI is predominantly replacing outsourced, offshore workers

And that report has this to say: "Our analysis reveals that GenAI-driven workforce reductions concentrate in functions historically treated as non-core business activities: customer support operations, administrative processing, and standardized development tasks. These roles exhibited vulnerability prior to AI implementation due to their outsourced status and process standardization. Executives were hesitant to reveal the scope of layoffs due to AI but it was between 5-20% of customer support operations and administrative processing work in these companies."

They interviewed 52 people, and some of them said yes to "Have you reduced headcount due to GenAI?" - which may indicate that those people believe this to be true.

hunglee2• 11 months ago

In hindsight, remote working is an obvious stepping stone to offshoring, which itself is an inevitable milestone toward full automation. It is the work we do in in-person collaboration which will keep the moat high against AI disintermediation.

lan3213• 11 months ago

Doubt. The meaningful work in person is organisational, and it's only marginally better onsite due to whiteboard > Excalidraw. Who does what, how it'll all interact, architecture, etc. If an LLM can code the difficult bits and doesn't fall apart once the project isn't a brand new proof of concept, it'll surely be able to pick the correct pattern and tooling and/or power through the mediocre/bad decision.

deadbabe2• 11 months ago

Have you used a whiteboard recently? It sucks. Writing anything significant takes forever, there’s no undo or redo, difficult to save and version. There’s just no way it’s better.

RaftPeople• 11 months ago

The meaningful work in person is organisational

And also gaining information about the domain from the business and the business requirements for the system or feature.

mensetmanusman4• 11 months ago

The invisible hand will provide the answer!

khuey• 11 months ago

remote working is an obvious stepping stone to offshoring

This I largely agree with. If your tech job can be done from Bozeman instead of the Bay Area there's a decent chance it can be done from Bangalore.

which itself is an inevitable milestone toward full automation

But IMHO this doesn't follow at all. Plenty of factory work (e.g. sewing) was offshored decades ago but is still done by humans (in Bangladesh or wherever) rather than robots. I don't see why the fact that a job can move from the Bay Area to Bozeman to Bangalore inherently means it can be replaced with AI.

scarface_744• 11 months ago

While I agree with remote work to offshoring. I’m not sure about the next step.

I would have been hard pressed to find a decent paying remote work as a fully hands on keyboard developer. My one competitive advantage is that I am in the US and can fly out to a customer’s site and talk to people who control budgets and I’m a better than average English communicator.

In person collobaration though is over rated. I’ve led mid six figure cross organization implementations for the last five years sitting at my desk at home with no pants on using Zoom, a shared Lucid App document and shared Google Docs.

DonnyV2• 11 months ago

H1Bs are replacing workers.

GuinansEyebrows5• 11 months ago

H1B is a type of visa, the holders of which are workers.

DonnyV2• 11 months ago

It was implied that is was American workers being replaced.

peterldowns• 11 months ago

“AI reshoring” is what I call it. Makes perfect sense.

candiddevmike• 11 months ago

Despite $30–40 billion in enterprise investment into GenAI, this report uncovers a surprising result in that 95% of organizations are getting zero return.

Oof

close04• 11 months ago

I'm wondering, if the return is that the employees get 20 minutes extra free time per day, is that a good, quantifiable return? Would anyone consider as a "return" anything that you can't put on your balance sheet?

DoctorOetker• 11 months ago

For companies competing in the same niche, the same low hanging fruits will be automated first if they invest in ML. So within the niche there is no comparative advantage.

It's pay big tech or fall behind.

grues-dinner2• 11 months ago

These are probably the same people who are "surprised" when 100 offshore agency dredgings don't magically do the app 10x faster than 10 expensive onshore workers.

To be fair, the PowerPoint they were shown at that AI Synergies retreat probably was very slick.

ToucanLoucan• 11 months ago

It's almost like the people in charge of these businesses have no goddamn clue what they're actually selling, how it works or why it's good (or isn't).

It's almost like, and stay with me here, but it's almost like the vast majority of tech companies are now run by business graduates who do not understand tech AT ALL, have never written a single line of code in their lives, and only know how to optimize businesses by cutting costs and making the products worse until users revolt.

SpaceManNabs2• 11 months ago

I have tried to digest why this is done. It is not because they believe they are 10x faster.

It is because they think it will 10x their chances of getting a really good engineer for 1/10th as cheap.

At least that is my theory. maybe i am wrong. i try to be charitable.

tmaly• 11 months ago

that meme with the oversized pants and penny loafers comes to mind.

charlieyu1• 11 months ago

I just don't understand why offshore agenies are so prevalent. Surely hiring directly would be cheaper and gives your more control when you are hiring >1000 workers

crazygringo3• 11 months ago

This is no different from the personal computer, and it is to be expected.

The initial years of adopting new tech have no net return because it's investment. The money saved is offset by the cost of setting up the new tech.

But then once the processes all get integrated and the cost of buying and building all the tech gets paid off, it turns into profit.

Also, some companies adopt new tech better than others. Some do it badly and go out of business. Some do it well and become a new market leader. Some show a net return much earlier than others because they're smarter about it.

No "oof" at all. This is how investing in new transformative business processes works.

datavirtue2• 11 months ago

I think it just turns into table stakes.

delusional• 11 months ago

The document actually debunks this take:

GenAI has been embedded in support, content creation, and analytics use cases, but few industries show the deep structural shifts associated with past general-purpose technologies such as new market leaders, disrupted business models, or measurable changes in customer behavior.

They are not seeing the structural "disruptions" that were present for previous technological shifts.

TimTheTinker• 11 months ago

transformative business processes

Many new ideas came through promising to be "transformative" but never reached anywhere near the impact that people initially expected. Some examples: SOA, low-code/no-code, blockchain for anything other than cryptocurrency, IoT, NoSQL, the Semantic Web. Each of these has had some impact, but they've all plateaued, and there are very good reasons (including the results cited in TA) to think GenAI has also plateaued.

My bet: although GenAI has plateaued, new variants will appear that integrate or are inspired by "old AI" ideas[0] paired with modern genAI tech, and these will bring us significantly more intelligent AI systems.

[0] a few examples of "old AI": expert systems, genetic algorithms, constraint solving, theorem proving, S-expression manipulation.

PhantomHour4• 11 months ago

This is no different from the personal computer, and it is to be expected.

What are you talking about? The return on investment from computers was immediate and extremely identifiable. For crying out loud "computers" are literally named after the people whose work they automated.

With Personal Computers the pitch is similarly immediate. It's trivial to point at what labour VisiCalc automated & improved. The gains are easy to measure and for every individual feature you can explain what it's useful for.

You can see where this falls apart in the Dotcom Bubble. There are very clear pitches; "Catalogue store but over the internet instead of a phone" has immediately identifiable improvements (Not needing to ship out catalogues, being able to update it quickly, not needing humans to answer the phones)

But the hype and failed infrastructure buildout? Sure, Cisco could give you an answer if you asked them what all the internet buildout was good for. Not a concrete one with specific revenue streams attached, and we all know how that ends.

The difference between Pets.com and Amazon is almost laughably poignant here. Both ultimately attempts to make the "catalogue store but on the computer" work, but Amazon focussed on broad inventory and UX. They had losses, but managed to contain them and became profitable quickly (Q4 2001). Amazon's losses shrank as revenue grew.

Pets.com's selling point was selling you stuff below cost. Good for growth, certainly, but this also means that their losses grew with their growth. The pitch is clearly and inherently flawed. "How are you going to turn profitable?" We'll shift into selling less expensive goods "How are you going to do that?" Uhhh.....

...

The observant will note: This is the exact same operating model of the large AI companies. ChatGPT is sold below unit cost. Claude is sold below unit cost. Copilot is sold below unit cost.

What's the business pitch here? Even OpenAI struggles to explain what ChatGPT is actually useful for. Code assistants are the big concrete pitch and even those crack at the edges as research after research shows the benefits appear to be psychosomatic. Even if Moore's law hangs on long enough to bring inference cost down (nevermind per-task token usage skyrocketing so even that appears moot), what's the pitch. Who's going to pay for this?

Who's going to pay for a Personal Computer? Your accountant.

jcfrei• 11 months ago

IMHO this is going to be part of a broader trend where advancements in AI and robotics nullify any comparative advantages low wage countries had.

ckorhonen• 11 months ago

I don’t fully agree. Yes, AI can be seen as a cheaper outsourcing option, but there’s also a plausible future where companies lean more on outsourced engineers who are good at wielding AI effectively, to replace domestic mid-level roles. In other words, instead of nullifying outsourcing, AI might actually amplify it by raising the leverage of offshore talent.

PhantomHour4• 11 months ago

Consider the kinds of jobs that are popular with outsourcing right now.

Jobs like customer/tech support aren't uniquely suited to outsourcing. (Quite the opposite; People rightfully complain about outsourced support being awful. Training outsourced workers on the fine details of your products/services & your own organisation, nevermind empowering them to do things is much harder)

They're jobs that companies can neglect. Terrible customer support will hurt your business, but it's not business-critical in the way that outsourced development breaking your ability to put out new features and fixes is.

AI is a perfect substitute for terrible outsourced support. LLMs aren't capable of handling genuinely complex problems that need to be handled with precision, nor can they be empowered to make configuration changes. (Consider: Prompt-injection leading to SIM hijacking and other such messes.)

But the LLM can tell meemaw to reset her dang router. If that's all you consider support to be (which is almost certainly the case if you outsource it), then you stand nothing to lose from using AI.

brandall10• 11 months ago

In a vacuum, sure. But when you take two resources of similar ability and amplify their output, it makes those resources closer in cost per output, and in turn amplifies the risk factors for choosing the cheaper by cost resource. So locality, availability, communication, culture, etc, become more important.

_DeadFred_• 11 months ago

I see it the other way around. An internal person with real domain knowledge can use AI far more effectively than an outsourced team. Domain knowledge is what matters now, and companies don’t want to pay for outsiders to learn it on their dime. AI let's the internal team be small enough that it's a better idea to keep things in house.

FirmwareBurner• 11 months ago

Lemme know when robots will make your sneakers and T-Shirts and pick fruits from fields at a competitive price to third world slave labor.

cantrevealname• 11 months ago

AI and robotics nullify any comparative advantages low wage countries had

If we project long term, could this mean that countries with the most capital to invest in AI and robotics (like the U.S.) could take back manufacturing dominance from countries with low wages (like China)?

daymanstep3• 11 months ago

China has more robots per capita than the US

And the idea that China has low wages is outdated. Companies like Apple don't use China for its low wages, countries like Vietnam have lower wages. China's strength lies in its manufacturing expertise

thisoneworks• 11 months ago

Hard disagree. You can't just one day wake up and double your energy infrastructure.. China is way ahead.

Aurornis2• 11 months ago

Manufacturing isn’t one uniform block of the economy that is either won or lost. US manufacturers focus on high quality, high precision, and high price orders. China excels at factories that will take small orders and get something shipped.

The reason US manufacturers aren’t interested in taking small volume low cost orders is that they have more than enough high margin high quality orders to deal with. Even the small-ish machine shop out in the country near the farm fields by some of my family’s house has pivoted into precision work for a big corporation because it pays better than doing small jobs

ceronman• 11 months ago

China dominance in manufacturing, at least in tech, it's not based on cheap labor, but rather in skills, tooling and supply chain advantages.

Tim Cook explains it better that I could ever do:

https://www.youtube.com/watch?v=2wacXUrONUY

adev_• 11 months ago

could take back manufacturing dominance from countries with low wages (like China)?

The idea that China is a low wages country should just die. It was the case 10y ago, not anymore.

Some part of China have higher average salaries than some Eastern European countries.

The chance of a robotic industry in the US moving massively jobs from China only due to a pseudo A.I revolution replacing low paid wages (without other external factors, e.g tarifs or sanctions) is close to 0.

Now if we do speak about India and the low skill IT jobs there. The story is completely different.

Teever• 11 months ago

Probably not because America lacks the blue collar skills necessary to build and service the kind of manufacturing infrastructure needed to do what you're describing.

Aurornis2• 11 months ago

Depends where you draw the line. I would expect countries like China will continue to leverage AI to extend their lead in areas like low cost manufacturing. Some of the very low cost Chinese vendors I use are already using AI tools to review submitted pieces with mixed results, but they’re only going to get better at it.

xenotux• 11 months ago

IMHO this is going to be part of a broader trend where advancements in AI and robotics nullify any comparative advantages low wage countries had.

Then why hasn't it yet? In fact, some lower-wage countries such as China are on the forefront of industrial automation?

I think the bottom line is that many Western countries went out of their way to make manufacturing - automated or not - very expensive and time-consuming to get off the ground. Robots don't necessarily change that if you still need to buy land, get all the permits, if construction costs many times more, and if your ongoing costs (energy, materials, lawyers, etc) are high.

We might discover that AI capacity is easier to grow in these markets too.

mensetmanusman4• 11 months ago

Hard to honestly say if China is low wage. On one hand, their wages have risen as the work force has shrunk now for a few years and tasks are being outsourced to other countries. On the other hand, their currency is pegged meaning that the earning power of the workers should be much higher so that they can afford the things they are making and transition to a consumer driven economy.

alecco• 11 months ago

Then why hasn't it yet?

Because the current companies are behind the curve. Most of finance still runs on Excel. A lot of other things, too. AI doesn't add much to that. But the new wave of Tech-first companies now have the upper hand since the massive headcount is no longer such an advantage.

This is why Big Tech is doing layoffs. They are scared. But the traditional companies would need to redo the whole business and that is unlikely to happen. Not with the MBAs and Boomers running the board. So they are doing the old stupid things they know, like cutting costs by offshoring everything they can and abusing visas. They end up losing knowledgeable people who could've turned the ship around, the remaining employees become apathetic/lazy, and brand loyalty sinks to the bottom. See how S&P 500 - top 10 is flat or dumping.

tempodox• 11 months ago

We might discover that AI capacity is easier to grow in these markets too.

If only because someone else has to build all the nuclear reactors that supply the data centers with electricity. /s

burnerRhodo• 11 months ago

it's wierd because where before, i've never had a offshore "VA" nor did I think they'd be useful. But after AI, I can just get the VA a subscription to Chatgpt and have them do the initial draft of whatever i need. ChatGPT get 80% of the way, VA gets the next 10 (Copying where i need it, removing obvious stuff that shouldn't be client facing, etc.), i only have to polish the last 10%.

kjkjadksj• 11 months ago

They will still be the cheaper countries to run your ai models and robotics factory by a longshot compared to the western world.

mickeyp• 11 months ago

That has long been my personal theory as well, though I never had a way of firmly backing it up with evidence, though this article hardly does that either.

But it does make sense on a superficial level at least: why pay a six-pack of nobodies half-way 'round the world to.. use AI tools on your behalf? Just hire a mid/senior developer locally and have them do it.

throwaway106382• 11 months ago

Good riddance.

avrionov• 11 months ago

For now!

api• 11 months ago

This makes a ton of sense. The interaction is similar: write specs, give orders, wait, review and fix results.

ChrisArchitect• 11 months ago

Source: https://nanda.media.mit.edu/ai_report_2025.pdf (https://news.ycombinator.com/item?id=44941374)

Or err, since that's been taken down: https://web.archive.org/web/20250818145714/https://nanda.med...

notyourwork3• 11 months ago

I can see this. We employ a lot of off shore for what we call support engineering. Things like jdk upgrades or cert updates. It’s grunt work that lets higher paid engineers utilize their time on business value work. As AI continues to grow in scope, it will surely commandeer much of this. Employing a human is more expensive when compared to compute for these tasks at a certain scale.

simianwords20• 11 months ago

Can I ask how the offshore team manages to deploy these changes? What skills are required for such a role in support engineering?

notyourwork3• 11 months ago

Through the CI/CD deployment pipeline that all code changes get deployed through. Primary engineering team reviews code and ensures things are tested appropriately.

If it requires a managed change, engineering team helps them draft the execution and schedule.

Skills would be similar to IT or dev ops but with expectation that they can code.

sitzkrieg• 11 months ago

i worked for a company that did this. then they opened an office in india and put us employees on call for india to squeeze em out haha

jmyeet5• 11 months ago

AI is going to force the issue of having to deal with the inequity in our economic system. And my belief is that this confrontation will be violent and many people are going to die.

The fundamental issue is wealth inequality. The ultimate forms of wealth redistribution are war and revolution. I personally believe we are already beyond the point where electoral politics can solve this issue and a violent resolution is inevitable.

The issue is that there are a handful of people who are incredibly wealthy and are only getting wealthier. The majority of the population is struggling to survive and only getting poorer.

AI and automation will be used to further displace working people to eke out a tiny percentage increase in profits, which will furhter this inequality as people can no longer afford to live. Plus those still working will have their wages suppressed.

Offshored work originally dsiplaced local workers and created a bunch of problems. AI and automation is a rising tide at this point. Many in tech considered themselves immune to such trends, being highly technical and educated professionals. Those people are in for a very rude shock and it'll happen sooner than they think.

Our politics is divided by those who want to blame marginalized groups (eg immigrants, trans people, "woke" liberals) for declining material conditions (and thus we get Brownshirts and concentration camps) and the other side who wants to defend the neoliberal status quo in the name of institutional norms.

It's about economics, material conditions and, dare I say it, the workers relationship to the means of production.

igleria• 11 months ago

personally believe we are already beyond the point where electoral politics can solve this issue and a violent resolution is inevitable.

I do think more or less this too, but it could be 4 years or 40 before people get mad enough. And to be honest the tech gap between civilian violence and state sponsored violence has never been wider. OR in other words, civilians don't have reaper drones etc etc.

jmyeet5• 11 months ago

I agree on time frames. This system can limp on for decades yet. Or fall apart in 5 years (though probably not).

As for the tech gap, I disagree.

The history of post-WW2 warfare is that asymmetric warfare has been profoundly successful, to the poin twhere the US hasn't won a single war (except, arguably, Grenada, if that counts, which it does not) since 1945. And that's a country that spends more on defence that something like the next 23 countries combined (IIRC).

Obviously war isn't exact the same thing but it's honestly not that different to suppressing violent dissent. The difficulty (since 1945) hasn't been defeating an opposing military on the battlefield. The true cost is occupying territory after the fact. And that is basically the same thing.

Ordinary people may not have reeaper drones and as we've seen in Ukraine, consumer drops are still capable of dropping a hand grenade.

Suppressing an insurrection or revolt is unbelievably expensive in terms of manpower, equipment and political will. It is absolutely untenable in the long term.

thewebguyd2• 11 months ago

No war but class war.

Not sure how long it will take for a critical mass to realize that that we are in a class war, and placing the blame on anything else won't solve the problem.

IOW, I agree with you, I also think we are beyond the point where electoral politics can solve it - we have full regulatory capture by the wealthy now. When governments can force striking workers back to work, workers have zero power.

What I wonder though, is why do the wealthy allow this to persist? What's the end game here, when no one can afford to live, whose buying products and services? There'll be nothing to keep the economy going. The wealthy can end it at any time, so what is the real goal? To be the only ones left on earth?

usefulcat• 11 months ago

You write as though "the wealthy" are a unified group acting in concert. They're not; they're just like everyone else in that regard, acting in their own, mostly short to medium term best interest. Seems like a pretty ordinary tragedy of the commons type of situation.

jmyeet5• 11 months ago

It's greed and short-term thinking, We shouldn't be surprised by this because we see companies do it all the time. How many times have you thought an employer or some company in the news is operating on a time horizon no further than the next quarterly results?

To be ultra-wealthy requires you to be a sociopath, to believe the bullshit that you deserve to be wealthy, it's because of how good you are and, more importantly, that any poverty is a personal moral failure.

You see this manifest with the popularity of transhumanism in tech circles. And transhumanism is nothing more than eugenics. Extend this further and you believe that future war and revolution when many people die is actually good because it'll separate the wheat from the chaff, so to speak.

On top of all that, in a world of mobile capital, the ultra-wealthy ultimately believe they can escape the consequences of all this. Switzerland, a Pacific island, space, or, you know, Mars.

The neofeudalistic future the ultra-wealthy desire will be one where they are protected from the consequences of their actions on massive private estate where a handful of people service their needs. Working people will own nothing and live in worker housing. If a few billion of them have to die, so be it.

keybored7• 11 months ago

Whether or not you are correct about the concrete details here, it is laughable for regular people[1] to bicker about whose job will be replaced first when the people who profit from that are just sitting on their ass, ready to get labor for nothing instead of relatively little.

[1] Although I wouldn’t be surprised if some of the people who argue about this topic online are already independently wealthy

simianwords20• 11 months ago

The people who profit from it are very much not sitting on their ass. It is easy to dismiss them as a way to reinstate your ideology but the reality is they too are working hard because it is a volatile time for them as well. They have to keep up and employ the new technology appropriately or they will lose to their competition.

simianwords20• 11 months ago

These are common simple Marxist points you are bringing up.

Your point hinges on: declining material conditions.

It is completely false - the conditions are pretty great for everyone. People have good wages relatively but sure inequality is increasing.

Since your main point is incorrect I don’t think your other points follow.

jmyeet5• 11 months ago

There are many ways to attack this assertion. For example:

1. The stagnation or decline in real wages in the developed world in recent decades;

2. Increasing homelessness as a consequence of the housing affordability crisis;

3. How global poverty has increased in the last century under capitalism. This surprises some because defenders claim the opposite. China is singlehandedly responsible to massive decrease in extreme poverty in the 20th century.

Maybe you're looking through the lens of tech. After all, we all have Internet-connected supercomputers in our pockets. While that's true, we're also working 3 jobs to pay for a 1 bedroom apartment where once a single job meant you had a house and enough to eat.

kelseyfrog5• 11 months ago

The ownership class and the labor class both suffer from a coordination problem.

The former from the coordination problem of extracting wealth but not fast enough that it solves the coordination problem for the labor class who, like you said, have strike first and revolt second as their battles of last resort.

The ownership class can voluntarily reduce wealth inequality, and they have before, but as history progresses and time marches on, so do the memories fade of what happens when they don't, pushing them closer and closer to options they don't want to admit work.

alephnerd• 11 months ago

Yep! The low value outsourcing firms like Indian WITCH companies have been heavily leveraging LLMs and laying off employees as a result.

High value product work remains safe from AI automation for now, but it was also safe from offshoring so long as domestic capacity existed.

musesum• 11 months ago

So, aside from trust the biggest barrier is lack of adaptability?

donperignon• 11 months ago

Yes, I agree. And it is not that AI is any good, but those outsourcing shops are most of the time not adding any value, all the contrary takes time to babysit them. Some of this even look like an elaborate scam, someone in the organization launder money through this companies somehow, otherwise I don’t understand how they are useful. Obviously there some good ones, but in my experience is not the norm.

segfaultex• 11 months ago

Yeah I think this will be a noticeable trend moving forward. We've frozen backfills in our offshore subsidiaries for the same reason; the quality is nonexistent and onshore resources spend hours every day fixing what the offshore people break.

jbreckmckye• 11 months ago

You are not wrong. Sometimes I have seen outsourcing relationships that I am sure are suspect in some way.

It may just be incompetence in large organisations though. Things get outsourced because nobody wants to manage them.

commandlinefan• 11 months ago

launder money through this companies

That would explain a lot, actually. If so, it'll be interesting to see what happens to the overall software economy when that revenue stream dries up. My wife grew up in Mexico on a border town and told me that the nightclubs in her town were amazing; when she moved to the US, she was disappointed by how drab the nightclubs here were. Later she found out that the border town nightclubs were so extravagant because they were laundering drug money. When they cracked down on the money laundering, the nightclubs reverted back to their natural "drab" state of relying on actual customers to pay the bills.

keybored7• 11 months ago

Pretend for a moment that capital investors do any work. Can AI replace that work?

walterbell• 11 months ago

  I'm sorry Dave. I can't answer that.

sneilan1• 11 months ago

They do a lot of work but a lot of market research can be automated too.

beastman82• 11 months ago

The investment bankers I know worked harder than any software developer to get where they are.

throwawayoldie3• 11 months ago

And yet have produced nothing of value for society.

bobsmooth• 11 months ago

I'm sure parasites work very hard to survive.

bilater• 11 months ago

The Indian IT sector is almost certainly going to be decimated (at least in its current form), and we haven’t really wrapped our heads around what that means for the world’s fourth-largest economy.

https://www.youtube.com/watch?v=CK-gnW3f-q0

dvrj101• 11 months ago

Indian IT sector in nutshell : https://youtu.be/LWfFD4DiUiA?si=VCpWVx_cKKCqCBxH&t=496

what this person has started is being done by WITCH companies at largest scale and most fraudulent way possible

hereme8887• 11 months ago

AI is already so much better than 99% of customer support employees.

It also improves brand reputation by actually paying attention to what customers are saying and responding in a timely manner, with expert-level knowledge, unlike typical customer service reps.

I've used LLMs to help me fix Windows issues using pretty advanced methods, that MS employees would have just told me to either re-install Windows or send them the laptop and pay $hundreds.

pluc5• 11 months ago

Except AI support agents are only using content that is already available in support knowledge bases, making the entire exercise futile and redundant. But sure, they're eloquent while wasting your time.

scarface_744• 11 months ago

It’s even worse than you think. I work with Amazon Connect. Now the human agent doesn’t have to search the Knowledge Base manually, likely answers will automatically be shown to the agent based on the conversation that you are having. They are just regurgitating what you can find for yourself.

But I can’t imagine ever calling tech support for help unless it is more than troubleshooting and I need them to actually do something in their system or it’s a hardware problem where I need a replacement.

klodolph• 11 months ago

Most of my questions are answerable from the support knowledge base.

mava_app• 11 months ago

There are AI agents that train from knowledge bases but also keep improving on actual conversations. For example, our Mava bot actually learns from mods directly within Discord servers. So it's not about replacing human mods but assist them so they can take better care of users in the end.

somenameforme2• 11 months ago

"Only" kind of misses the benefit though. I'm very bearish on "AI", but this is an absolutely perfect use case for LLMs. The issue is that if you describe a problem in natural language on any search engine, your results are going to be garbage unless you randomly luckboxed into somebody asking, with near identical verbiage, the question on some Q&A site.

That is because search is still mostly stuck in ~2003. But now ask the exact same thing of an LLM and it will generally be able to provide useful links. There's just so much information out there, but search engines just suck because they lack any sort of meaningful natural language parsing. LLMs provide that.

d1sxeyes2• 11 months ago

I would agree, but I’ve spent the last ten years or so working with outsourced tech support and I guarantee you, a lot of people call us just because they can’t be bothered to look for themselves.

hereme8887• 11 months ago

AI has all sorts of technical knowledge, plus massive working memory, and high IQ-ish. It's vastly, vastly superior to most IT support agents.

bilsbie• 11 months ago

This is great but most customer support is actually designed as a “speed bump” for customers.

Cancel account- have them call someone.

Withdraw too much - make it a phone call.

Change their last name? - that would overwhelm our software, let’s have our operator do that after they call in.

Etc.

gruez• 11 months ago

Change their last name? - that would overwhelm our software, let’s have our operator do that after they call in.

That doesn't make much sense. Either your system can handle it or it can't. Putting a support agent in front isn't going to change that.

nkingsy• 11 months ago

It isn’t empowered to do anything you can’t already do in the UI, so it is useless to me.

Perhaps there is a group that isn’t served by legacy ui discovery methods and it’s great for them, but 100% of chat bots I’ve interacted with have damaged brand reputation for me.

another-dave4• 11 months ago

A chatbot for those sorts of queries that are easily answerable is great in most scenarios though to "keeps the phone lines clear"

The trouble is when they gatekeep you from saying "I know what I'm doing, let me talk to someone"

nurumaik• 11 months ago

I don't want AI customer support. I want open documentation so I can ask AI if I want or ask human support if it's not resolvable with available documentation

All my interactions with any AI support so far is repeatedly saying "call human" until it calls human

aydyn2• 11 months ago

This is such a HN comment lol.

Customer support is when all the documentation already failed and you need a human.

cafebeen• 11 months ago

When asking customers how well they were helped by the customer support system (via CSAT score), I've found industry-standard AI support agents will generally perform worse than a well-trained human support team. AI agents are fine at handling some simple queries, e.g. basic product and order informatino, but support issues are often biased towards high complexity, because otherwise they could solve it in a more automated. I'm sure it depends on the industry, and whether the customer's issue is truly novel.

aydyn2• 11 months ago

I think the main problem is access, not quality.

I.e. AI isn't allowed to offer me a refund because my order never arrived. For that, I have to spend 20 minutes on the phone with Mike from India.

pesus• 11 months ago

Improves brand reputation? I don't think I've seen a single case where someone is glad to talk to an LLM/chat bot instead of an actual person. Personally, I think less of any company that uses them. I've never seen one be actually useful, and they seem to only really regurgitate links to FAQ pages or give the most generic answers possible while I fight to get a customer service number so I can actually solve the problem at hand.

hereme8887• 11 months ago

I use SOTA LLM chatbots to solve issues that would take a long time via human customer service reps. In fact, LLMs solve things quicker than it takes to get a human on the phone/chat/forum response.

onlyrealcuzzo• 11 months ago

AI is already so much better than 99% of customer support employees.

99% seems like a pulled-out-of-your-butt number and hyperbolic, but, yes, there's clearly a non-trivial percentage of customer support that's absolutely terrible.

Please keep in mind, though, that a lot of customer support by monopolies is intended to be terrible.

AI seems like a dream for some of these companies to offer even worse customer service, though.

Where customer support is actually important or it's a competitive market, you tend to have relatively decent customer support - for example, my bank's support is far from perfect, but it's leaps and bounds better than AT&T or Comcast.

ponector• 11 months ago

> 99% seems like a pulled-out-of-your-butt number

I don't agree. AI support is as useless as real customer support. But it is more polite, calm, with clear voice, etc. Much better, isn't it?

IAmGraydon• 11 months ago

MS customer service is perhaps the lowest bar available. One look at their tech support forums tells you that most of what they post is canned garbage that is no help to anyone.

AI is not better than a good customer service team, or even an above-average one. It is better than a broken customer service team, however. As others have noted, 99% is hyperbolic BS.

GuinansEyebrows5• 11 months ago

AI is already so much better than 99% of customer support employees.

i have yet to experience this. unfortunately i fear it's the best i can hope for, and i worry for those in support positions.

kldg2• 11 months ago

As someone who was recently screwed over by LLM CSR, I'd respectfully disagree. Amazon replaced their offshore humans with LLMs recently. They put the "subscribe to Prime" button on the right-hand side of the screen when you go to checkout. It's a one-click subscription. I accidentally clicked it a few days ago.

I immediately hop on customer service chat to ask for a refund. I was surprised to be talking to an LLM rather than a human, but go ahead and explain what happened and state I want the transaction for the subscription canceled. It offers to cancel the subscription at the end of the 30-day subscription. I decline, noting I want a refund for the subscription I didn't intend to take. It repeats it can cancel the subscription at the end of 30-day subscription. I ask for human. It repeats. I ask for human again. It repeats. I disconnect.

Amazon knows what it's doing.

Nextgrid• 11 months ago

This occurrence has nothing to do with AI? The reason AI doesn't want to grant you the refund is because it's not been given the ability to do so. It would be no different with a human.

If Amazon wanted to give you the ability to get a refund for unused Prime benefits, it would allow the AI to do it, or even give you a button to do it yourself.

torginus5• 11 months ago

I wonder if AI automation will even lead to a recession in total software engineering revenue.

At my job, thanks to AI, we managed to rewrite one of our boxed vendor tools we were dissatisfied with, to an in-house solution.

I'm sure the company we were ordering from misses the revenue. The SaaS industry is full of products whose value proposition is 'it's cheaper to buy the product from us than hire a guy who handles it in house'

ido• 11 months ago

Historically imporvments in programmer productivity (e.g. via better languages, tooling and hardware) didn't correlate to a decrease in demand for programemrs, but quite the opposite.

scarface_744• 11 months ago

This is completely different - said as someone who has been in the industry professionally for 30 years and as a hobbyist before then for a decade.

There are projects I lead now that I would have at least needed one or maybe two junior devs to do the grunt work after I have very carefully specified requirements (which I would have to do anyway) and diagrams and now ChatGPT can do the work for me.

That’s never been the case before and I’ve personally gone from programming in assembly, to C, to higher level languages and on the hardware side, personally managing the build out of a data center that had an entire room dedicated to a SAN with a whopping 3TB of storage to being able to do the same with a yaml/HCL file.

torginus5• 11 months ago

Imo historically there was no connection between the two - demand for programmers increased, while at the same time, better tools came along.

I remember Bill Gates once said (sometime in the 2000s) that his biggest gripe, is during his decades in the software industry, despite dramatic improvements in computing power and software tools, there has only been a modest increase in productivity.

I started out programming in C for DOS, and once you got used to how things were done, you were just as productive.

The stuff frameworks and other stuff help with, is 50% of the job at max, which means due to Amdahls law, productivity can at most double.

In fact, I'd argue productivity actually got reduced (comparing my output now, vs back then). I blame this on 2 factors:

- Distractions, it's so easy to d*ck around the internet, instead of doing what you need to do. I have a ton of my old SVN/CVS repos, and the amount of progress I made was quite respectable, even though I recall being quite lazy.

- Tooling actually got worse in many ways. I used to write programs that ran on the PC, you could debug those with breakpoints, look into the logs as txt, deployment consisted of zipping up the exe/uploading the firmware to the uC. Nowadays, you work with CI/CD, cloud, all sorts of infra stuff, debugging consists of logging and reading logs etc. I'm sure I'm not really more productive.

MangoCoffee• 11 months ago

I've done a vibe coding hobby project where I simply give AI instructions on what I want, using a persona-based approach for the agent to generate or fix the code.

It worked out pretty well. Who knows how the software engineering landscape will change in 10 to 20 years?

I enjoyed Andrej Karpathy's talk about software in the era of AI.

https://www.youtube.com/watch?v=LCEmiRjPEtQ

bcrosby952• 11 months ago

As an aside, his talk isn't about using AI to write code, it's about using AI instead of code itself.

simianwords20• 11 months ago

What you are saying is not intuitive. Software engineers are a cost to software companies. With automation the profits would increase so I’m not sure how it can lead to recession.

graeme2• 11 months ago

They used the word in an irregular way. They meant a decline in software company revenue, not an economic recession.

You might well see more software profits if costs go down but less revenue. Depends on Jevon's paradox really

golol• 11 months ago

More middlemen = more revenue/GDP, right?

torginus5• 11 months ago

Something not being intuitive doesn't make it untrue - if AI makes engineers 10x as productive it means that we need 1/10th the engineers to produce as much software as we do - it might induce demand but demand might not keep up with the production. SW Engineering might become a buyers market instead of a sellers market.

One example I mentioned is SaaS whose value proposition is that it's cheaper than to hire a dedicated guy to do it - if AI can do it, then that software has no more reason to exist.

abullinan• 11 months ago

I have hired “outsourced, offshore workers”. Anyone who has similar experience knows the challenges of finding quality talent. Generally, you don’t know what you’re going to get until you’ve already written the first check. Sometimes it is good quality, but lots of the time it is “acceptable” quality or poor quality that needs cleaning (or re-hiring), and 5% of the time it is absolute garbage. Since the costs are typically 1/10th to 1/20th that of US engineer, you can afford to make a few mistakes. However, I can see a future where I can hire local (US) and outsource to AI with oversight within the same budget.

anelson• 11 months ago

The move that I’m fighting in my company now is hiring bargain basement Indian outsourced heads who are very obviously vibe coding slop. It’s a raw deal for us since we’re paying extra for a meat wrapper around an LLM coding agent, but I’m sure it’s a boon for the outsourcing company who can easily put one vibe-coding head on three or four engagements in parallel. It’s hard to imagine LLM coding technologies not being enthusiastically adopted by all of the outsourcers given the economic incentives to do so.

Whether or not they end up losing business long term, it seems like a nice grift for as long as they can pull it off.

keeda2• 11 months ago

One thing I recently realized is that the evolution and discussions of AI very closely mirrors those of offshoring, when offshoring first started off. Back then too discussions were about:

1) The quality of work produced being sub-par, with many instances of expensive, failed projects, leading to predictions of the death of offshoring.

2) Unwillingness of offshore teams to clarify or push back on requirements.

3) Local job displacement.

What people figured out soon enough was that offshoring was not as easy as "throwing some high-level requirements over the wall and getting back a fully functional project." Instead the industry realized that there needed to be technically-competent, business domain-savvy counterparts in the client company that would work closely with the offshore team, setting concrete and well-scoped milestones, establishing best practices, continously monitoring progress, providing guidance, removing blockers, and encouraging pushback on requirements, even revisiting them if needed.

Offshore teams on their part became culturally more comfortable with questioning requirements and engaging in 2-way discssions. Eventually offshore companies built up the business domain knowledge such that client companies could outsource higher- and higher-level work.

All successful outsourcing projects followed this model, and it spread quickly across the industry, which was why the predictions of the death of offshoring never materialized. In fact the practice has only continued to grow.

It's very interesting how much the same strategies apply to working with AI. A lot of the "how to code effectively with AI" articles basically offer the exact same advice.

On the job displacement side, however, the story may be very different.

With outsourcing, job displacement didn't turn out to be much of a concern because a) by delegating lower-level grunt work to offshore teams, local employees were then freed up to do higher-level, more innovative work; and b) until software has "eaten the whole world" the amount of new work is essentially unbounded.

With AI though, the job displacement could be much more real and long-lasting. The pace at which AI has improved is mind-boggling. Now the technically-competent, business-domain savvy expert could potentially get all the outsourced work done by themselves through an army of agents with very little human support, either local or offshore. Until the rest of the workforce can upskill themselves to the level of "technically-competent, business domain-savvy expert" their job is at risk.

"How many such roles does the world need?", and "How can junior employees get to that level without on-the-job experience?", are very open questions.

yc-kraln• 11 months ago

I work with Claude more-or-less how I worked with our Indian colleagues; the difference is Claude is improving over time.

AI is predominantly replacing outsourced, offshore workers

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