Reply to: State of the Market

[willendure]

AI will have the exact same crash as the dot.com boom. Hard to figure out which one will be bigger.

During the 1999 dot.com boom, any penny stock company that sent out runours of internet involvement went from nothing to gold and then later nothing.

Now, they just stick AI on the back of their name and the stock soars.

A single NVIDIA partner data center (under construction) was shown to need as much electricity to power it as it takes to power NYC, That power does not exist in the USA. Yet, they just keep building those data centers.

The AI revolution is going nowhere. Yet, for now, those AI companies are being pumped with cash with few investors considering the upcoming crash.

Yep. In some sense the really big players look Micrsoft or Google know there will be a crash, but also know they will survive. So competing hard in AI could be a way for them to kill off the competition in the longer term.

Sold all AI stocks I own. Also sold all my bitcoin just as the current downtrend was getting started. Gold miners is where its at for me currently. $$

[herman_g]

When someone like him that warns he's really worried about irrational AI investment levels then it's really time to start to worry.

It feels like 1999 again...

AI will have the exact same crash as the dot.com boom. Hard to figure out which one will be bigger.

During the 1999 dot.com boom, any penny stock company that sent out runours of internet involvement went from nothing to gold and then later nothing.

Now, they just stick AI on the back of their name and the stock soars.

A single NVIDIA partner data center (under construction) was shown to need as much electricity to power it as it takes to power NYC, That power does not exist in the USA. Yet, they just keep building those data centers.

The AI revolution is going nowhere. Yet, for now, those AI companies are being pumped with cash with few investors considering the upcoming crash.

[The_Equalizer]

It feels like 1999 again...

Although in 1999 there were a vast number of roles. Can't quite imagine what a bust in the current market would look like.

[TheDude]

Not the ones from India/off-shore. They normally have a queue of people wanting to work for peanuts and a visa in my experience.

My last city gig was at a European bank. The development floor was at least 80% Indian they were either extremely careful with their money or were getting paid way less than (at least what used used to be) the going rate.

There were exceptions but in general they were lower calibre developers than I was used to working with. I don't blame them for chasing opportunity but if and when they are made redundant some will really struggle.

[TheDude]

But haven't consultancies historically backfilled with contractors?

I guess - I am working for the government via a consultancy and a supplier. The rate is crap presumably because everyone in the supply chain is taking a chunk.

I have had zero contact with the consultancy since starting in September.

I'm not complaining because at least I am getting paid and it is outside but I am on £200 a day less that I was getting in 2013.

[pjt]

But haven't consultancies historically backfilled with contractors?

Thats where I seem to be getting work these days. Some of the small consultancies are almost like agencies in disguise. They pitch for work and when they win they have a pool of contractors they can utalise. I have to say its worth getting some contacts with these guys if they like you they can be a good source of work.

[pjt]

Interesting point. Are there fewer people in their early to mid-30s, continuing to go into contracting?

10-15 years ago it seemed that I worked with a lot of contractors who were under 35. Now there seem to be fewer younger ones about.

This forum seems to be disproportionately populated by people well past 40 so I don't think we're particularly representative of 'the market'.

Funnily enough my son has just picked up his first contract role. Hes still at Uni but has ben offered a part time gig with a small startup. Outside IR35 so their is some hope for the younger ones. I've given him a strong warning not to go down this road when he graduates though as its looking like a tough sell longer term.

[edison]

So now we have even more competition from the consultancies and new contractors.

Hence why there is fewer jobs, contracts and more people available. And this of course causes the rates to drop. A horrible cycle.

This will only end when demand out strips supply. We need a tech revolution, a market distributor or something that will require enterprises to force a massive tech change.

AI clearly isn't the tech revolution that was anticipated, at least in terms of job creation, contract opportunities etc.

Almost every day now there is a warning about the insane level of capex investment going into AI infrastructure and tech stock market valuations.

Google's CEO warned yesterday about the irrational AI investment boom following on from notable warnings from the Bank of England and JP Morgan's CEO.

The one that really worried me was the CEO of Klarna who has been one of the biggest AI proponents. He fired 700 customer service staff and replaced them with AI bots which ended up being a disaster so they had to hire staff again.

When someone like him that warns he's really worried about irrational AI investment levels then it's really time to start to worry.

It feels like 1999 again...

[edison]

Problem is if the eco-system of contracting gets dismantled it will reach a point, or indeed might have already, where there is a terminal decline and it can't scale back up if the market improves and can't be a sizeable industry again.

Interesting point. Are there fewer people in their early to mid-30s, continuing to go into contracting?

10-15 years ago it seemed that I worked with a lot of contractors who were under 35. Now there seem to be fewer younger ones about.

This forum seems to be disproportionately populated by people well past 40 so I don't think we're particularly representative of 'the market'.

[SchumiStars]

But haven't consultancies historically backfilled with contractors?

Not the ones from India/off-shore. They normally have a queue of people wanting to work for peanuts and a visa in my experience.

The only problem with that is, when they get their visas they become a contractor. So now we have even more competition from the consultancies and new contractors.

Hence why there is fewer jobs, contracts and more people available. And this of course causes the rates to drop. A horrible cycle.

This will only end when demand out strips supply. We need a tech revolution, a market distributor or something that will require enterprises to force a massive tech change.

[fatJock]

Talked to him about why the banks were not hiring and it seems they can avoid hiring contractors (IR35) by just outsourcing the work to consultancies on the same rate but outside IR35.

But haven't consultancies historically backfilled with contractors?

[courtg9000]

The every so often call bomb for me.
2 calls this morning both for the same thing.
Tech I have not touched in 13 years.
Punter is "local".
Definitely Inside though the conversations didn't get that far.
Rate - crap.
Obviously there is an ancient CV kicking around somewhere on the internet.

[SchumiStars]

Had a nice chat with a recruiter this morning. Everyone is in agreement, that this is the worst job market in decades.

Talked to him about why the banks were not hiring and it seems they can avoid hiring contractors (IR35) by just outsourcing the work to consultancies on the same rate but outside IR35.

Makes sense, why would they risk getting fined. Does look like IR35 is one of the big reasons why contracting is a finished market.

[SussexSeagull]

Fair comment. Word of mouth seems the way of it now. I'm not smug with this arrangement, as it pushes out good contractors from finding work. It's as if the impenetrable world of insurance is now across most sectors and recommendations are one of the few ways to get work. I'm not working full time on any single contract and like it this way, but scope creep is happening more often as clients try to get many more hours than they say they are willing to pay for. It's a ruse to exploit desperate contractors. I've managed to stop two clients expecting full time office hours for what certainly is part time 2 days a week project.

You do hear of people who are in a similar position to you and are doing ok or indeed quite well. I agree about word of mouth but it doesn't help if they haven't got any work going.

Problem is if the eco-system of contracting gets dismantled it will reach a point, or indeed might have already, where there is a terminal decline and it can't scale back up if the market improves and can't be a sizeable industry again.

Good luck to you though.

[agentzero]

I am out the game now but looking on here and on LinkedIn I think your experience is fairly atypical of the current contract market.

Fair comment. Word of mouth seems the way of it now. I'm not smug with this arrangement, as it pushes out good contractors from finding work. It's as if the impenetrable world of insurance is now across most sectors and recommendations are one of the few ways to get work. I'm not working full time on any single contract and like it this way, but scope creep is happening more often as clients try to get many more hours than they say they are willing to pay for. It's a ruse to exploit desperate contractors. I've managed to stop two clients expecting full time office hours for what certainly is part time 2 days a week project.