I think AI is a component of the decline.

For decades, companies have operated under the misunderstanding that more software developers equals more success, despite countless works explaining that’s not how it works. As a result many of these companies have employed an order of magnitude more than they probably should have and got worse results than they would have. However the fact they got subpar results with 10x a good number just convinced them that they didn’t hire enough. Smaller team produce better results made zero sense.

So now the AI companies come along and give a plausible rationalization to decrease team size. Even if the LLM hypothetically does zero to provide direct value, the reduced teams start yielding better results, because of mitigating the problems of “make sure everyone is utilized, make sure these cheap unqualified offshored programmers are giving you value, communicate and plan, reach consensus along a set up people who might all have viable approaches, but devolved into arguments over which way to go”.

AI gives then a rationalization to do what they should have done from the onset.