And because of massive overhiring. In that scenario, the sequence of events is: Cheap money (ZIRP), companies hiring developers just to deny them to the competition (there were reports) or for empire building or as a signal to investors (etc), AI and nonzero interest rates come around, need to spend billions on AI with limited money -> lay off overhired developers and say it's because AI replaces them. It's great for companies because it allows to admit no mistake regarding the overhiring and claim to be fully in on the current thing.

Simple enough, no?

My reality: Before AI Tokens I had to hire someone. External or normal.

After AI Tokens: I don't need to hire someone anymore and if, i need to know why. Because if i have an contractor for 1-2 years and explain a lot to them, i can just explain it to AI.

Also i prefered before already to not hire someone if i had the feeling they don't have potential, now i have even less incentive to do so.

Which means that those contractors (solo or companies) struggle to get work. For the companies that means laying off some/all employees.

The net result is unemployed or effectively unemployed people, who cut back on extra spending (games, patreon, subscriptions, etc.).

That puts pressure on those people/companies which then repeats as they have reduced revenue. So the cycle repeats.

Yeah absolutly. The question though will be if capitalism is able to update its gain function somehow or if the system collapses.

As long as robots are not there yet, there might be enough of buffer in the whole system for non computer jobs to catch but i'm not seeing this either.

It will increase pressure on every industry.

And it might also lead to an increase in speed of adoption because everyone getting fired, will have the tools to fill any niche.