Shifts are under way in the world of software development. Since the launch of Chat in 2022, bosses have been keen to explore new ways to use artificial intelligence. While most efforts have yielded limited results, one notable exception is programming.
Surveys suggest that developers around the world find generative AI so useful that already about two-fifths of them use it regularly. AI and globalisation are making big impacts on software development. Generative AI tools are proving to be very helpful for developers by increasing efficiency and reducing costs.
This is changing the dynamics of the industry. These technological advancements are not just limited to coding. The broader effects extend to software development practices and the labor market.
As AI continues to evolve, it is expected that the cost of writing and maintaining code will decrease. However, this may also lead to decreased demand for human programmers. This could drive down their wages.
The combination of AI and globalisation means that coding tasks previously outsourced to lower-cost markets might now be automated. This is forcing software developers to adapt and acquire new skills to remain competitive. In a notable development for the technology sector, AI is expected to move its operations from the cloud to the edge.
This shift will have far-reaching effects for the industry. The drive to bring artificial intelligence closer to where data is collected, known as “edge AI,” aims to enhance performance and efficiency. It does this by processing information on local devices such as smartphones and PCs, rather than relying on remote data centers.
Generative AI impacting software development
This shift promises faster processing times, reduced latency, and improved privacy and security measures. Leading tech giants like Alphabet, Microsoft, Amazon, and Meta Platforms have significantly increased their spending on AI advancements.
This reflects the growing investment in this area. Edge AI, in particular, is expected to be a key driver in boosting hardware sales, especially in the smartphone and PC markets. The adoption of edge AI technologies is set to transform various industries as businesses seek to use the power of real-time data processing.
From enhancing autonomous vehicles’ safety features to improving the efficiency of industrial automation systems, edge AI’s applications are diverse and far-reaching. Consulting group Bain & Company recently published a sweeping report on the state of technology. It predicted a possible chip shortage in the coming years.
This shortage could arise as demand for semiconductors needed for infrastructure buildout surges, coupled with a potential smartphone and PC upgrade cycle. Nvidia’s semiconductor chips are some of the most sought-after in the market today, particularly within data centers, where demand is currently very high. Nvidia has an over 80% market share in the GPU space and has created a significant moat with its CUDA software platform, which has become the industry standard for GPU programming.
As the world’s largest semiconductor manufacturer, Taiwan Semiconductor Manufacturing Company (TSMC) produces more chips than any other company. In the event of a chip shortage, demand for TSMC’s services would likely be strong, keeping its foundries running at near full capacity. High demand contributes to high margins due to the high fixed-cost nature of semiconductor manufacturing.
The Netherlands’ ASML Holding is at the forefront of semiconductor manufacturing equipment production. This sector is currently experiencing a transitional year as the industry digests the supply of certain logic and memory chips. However, AI-driven hardware refresh cycles could improve these markets.
A chip shortage would likely further increase demand for its equipment.
