Companies indeed hired someone (Asian) almost as good elsewhere for a fraction of cost.

> This has echoes of the same argument that why hire anybody in the US when you can hire someone almost as good elsewhere for a small fraction of the cost.

The reason in workplaces people don't hire somebody else at a fraction of the cost isn't because American workers are 15% smarter than non-Americans. It was just very difficult to have exactly 1 remote worker on a team, language barrier, international laws, etc.

In my experience people generally aren't willing to pay double the salary for 15% better work. They will however pay market for domains where nobody else is qualified.

>people generally aren't willing to pay double the salary for 15% better work

Actually, companies are already willing to pay double for 15% better work - the proof is in what SWE salaries in America have currently become.

Companies are pretty much paying at the frontier of marginal improvement (not returns, which again, are hockey-stick) - i.e. it's not like paying 800k will reliably hire someone 15% better than the 400k that they're currently paying.

At this point, the limiting factor is their reach-out and interviewing processes, and the ability of the brand name to attract talent (OpenAI can actually get better talent by paying 800k; Microsoft would not because they're still Microsoft and some people would simply never respond to a Microsoft recruiter even if they lead with "this role pays 800k").

Is the winner-takes-all market in the room right now? everybody switching models and harnesses non stop.

Then explain why big corps like MS or Google are outsourcing to development centers in a much cheaper country (India, China).

The explanation is simply that it's a mistake.

American software has flip-flopped between rushing to outsource and realizing that outsourcing is a bad idea. LLMs (plus US work visa policy headwinds) are simply what triggered the current flip cycle.