---
title: "AI Coding: $12M return for $240K spend?"
date: "2024-09-08T02:05:11Z"
lastmod: "2024-09-08T02:05:12Z"
categories:
  - links
wp_id: 3623
description: "AI coding tools may be a spreadsheet-scale productivity shift for developers, with modest license costs potentially offset by large savings, faster capability building, and stronger client work."
keywords: ["AI coding", "developer productivity", "Cursor", "Copilot", "engineering strategy", "ROI"]
---

**This is an email I sent to our leadership team a few minutes ago.**

We may be witnessing the third major leap in computing productivity, after high-level languages in the 1960s and spreadsheets in the 1980s

In the last few weeks, AI coding really took off. [Cursor](https://www.cursor.com/), [Cody](https://sourcegraph.com/cody), [Replit Agents](https://docs.replit.com/replitai/agent) are FAR better than GitHub Copilot.

[Research](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4945566) on ~5,000 devs in Fortune 100 shows that even GitHub Copilot makes them ~25% more productive.

Personally, Cursor helped me:

1. Write **faster** code (at least 2X). I've given away my team (there's not enough work for them).

2. Write **better** code. I now document code for others to replicate - because it's so easy.

3. Write **complex** code. I've built stuff I didn't know how to. WhatsApp agents, AI code writers, even LLM Foundry. Each has opened a client's door.

**So, should we leverage AI Coding for our developers?**

Maybe not. Consider these risks.

1. It costs $10-$20/month/dev. That's $120-$240K/year for ~1,000 devs.

2. Clients may not be comfortable with us using AI coding. IP. Security.

3. Higher productivity reduces our T&M billing, hence revenue.

Maybe yes. Consider these benefits.

1. We could save 25% per developer. Maybe $4K/month/dev x 25% = $12M/year

2. We could win more complex engagements. (Pitching AI coding as an edge has worked well, too.)

3. We could reduce time to get someone to a tech-lead level.

There's probably no one-size-fits-all answer. We might need to pilot while we strategize.

**How might this impact our hiring and training?**

1. **Hire for AI coding skills**. In interviews, I'd look for use of AI coding agents. We need a few AI coding leads to share our engineering future.

2. **Hire for dual skills**. AI can take care of the code. I'd hire people with good client-facing skills.

3. **Train on AI coding**. Integrate these into the onboarding process. Train existing devs.

4. **Train non-developers**. Analysts, designers, managers can become as good as junior devs.

**Why am I mailing you?**

In Nov 2022, when ChatGPT was released, I thought LLMs were the biggest knowledge leap since Google.

In Sep 2024, with Cursor, Cody, and Replit agents, I think AI coding the biggest productivity leap since Excel.

This is not for immediate action.

Please think over it. Share it. Discuss it. Pilot it. Let's explore.