Don't let GenAI hollow out your workforce

Welcome to Runtime! Today: why using generative AI to automate entry-level jobs could backfire, the ransomware part of the Snowflake data leak story is well underway, and the latest funding rounds in enterprise tech.

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Programming note! Runtime will be taking some time off over the next couple of weeks — when nothing really happens anyway — to rest and recharge for the second half of the year. We'll be back in your inboxes on Tuesday July 9th.

Bringing up junior

Over the last 18 months, businesses have been urged to adopt generative AI services sooner rather than later, or risk falling behind competitors that have embraced the technology. A small but noticeable amount of desperation is seeping into the pitch as companies start to realize that adopting those services and taking away the moments that make up a dull day could have far-reaching effects on how they hire, train, and promote junior staff members.

Honeycomb co-founder and CTO Charity Majors captured this well in an essay last week entitled "Generative AI is not going to build your engineering team for you." Over the last several weeks of travel across the Bay Area, I've also had several conversations with tech and media leaders who are increasingly worried that the push to use generative AI to automate analytical business tasks could produce a generation of workers that never develop the foundation to do the job well at a senior level.

• "Software is an apprenticeship industry," Majors wrote. "You can only learn by doing…and doing, and doing, and doing some more."
• The same is true in many other industries that are looking to AI in hopes of reducing the number of junior staffers needed to produce basic reports about how a marketing campaign landed, or analyze earnings results across a given sector, according to folks I've recently talked with.
• Much of that is busywork, and seems like the kind of thing generative AI was designed to save us from. But it's also how people learn.
• "Giving code review feedback to a junior engineer is not like editing generated code. Your effort is worth more when it is invested into someone else’s apprenticeship," Majors wrote.

This is called the "to be sure" section: there's no doubt that in general, automation has eliminated countless business tasks that have freed up time for other, more worthy pursuits. Nobody closes their quarter on paper anymore, but people raised in the current environment still manage to become senior finance executives.

• If anything, coding assistants reinforce the idea that coding is just one part of a productive software engineer's job, and not necessarily the most important one.
• Likewise, writing assistants and auto-generated meeting summaries can make it much easier for a harried knowledge worker to communicate clearly or avoid missing an important detail.
• And generative AI assistants could allow people with certain types of disabilities to bring their much-needed perspective to the modern workforce.

But senior tech and business leaders need to realize that they risk "cannibalizing" (as Majors put it) their future by adopting generative AI services solely to reduce headcount in the junior ranks. 

• Businesses that depend on teamwork to develop products or win contracts need people with a variety of skill sets and experience levels to thrive.
• Businesses that want to be around for a while also put a lot of emphasis on internal training and development, because recruiting external people at senior levels can be more expensive than building a junior person into a senior role.
• That's not to say businesses should ignore the potential of generative AI services in helping employees go about their jobs, but that those services need to be adopted in ways that still allow people to acquire the skills they need to thrive.
• And that probably means slowing the pace of generative AI adoption, which is starting to worry AI vendors.

Don't miss the June 2024 edition of the Runtime Roundtable, which asked this question: What's the biggest mistake companies make when trying to modernize their data stack? Read answers from experts at Juniper Networks, Intuit, FICO, and more.

Your money or your data

The extortion stage of the attack on Snowflake customers over the last few weeks has begun. Bloomberg reported Monday that up to 10 customers are being hit with demands for as much as $5 million to recover their data.

The attackers are "seeking prices above typical black-market rates for the data stolen from Snowflake customers," according to Mandiant's Austin Larsen, per Bloomberg. It does that appear that any of the victims have yet to pay a ransom, which they must disclose to the SEC and which the vast majority of security experts advise against doing.

On the good side, it doesn't appear that any new Snowflake customers have been affected since the vendor urged customers to turn on multifactor authentication and promised to enforce mandatory MFA use in the near future. But an estimated 165 customers were ensnared by the attack, so the ransom demands are likely just beginning.

Enterprise funding

Huntress raised $150 million in Series D funding to combine its cybersecurity software products for small businesses into a platform.

Finbourne landed $70 million in Series B funding for its financial data software, which helps companies build AI models around that data.

Tinybird scored $30 million in Series B funding to add AI and support for Apache Iceberg to its real-time data analytics software.

Factory raised $15 million in Series A funding for its automated software development tools.

The Runtime roundup

HPE launched a new line of AI servers featuring hardware and software co-designed by Nvidia, which it hopes will deter companies from training AI models with cloud providers.

Meanwhile, Nvidia scooped up Shoreline, an observability company founded by former AWS executive Anurag Gupta.

Linux Foundation executives paid themselves 52% more in salaries during 2022 compared to four years prior, according to The Information.

Just under 20% of SQL Server instances in the wild are running on unsupported versions of the software, which is way too many.

Thanks for reading — enjoy the holidays, see you in July!