AI and large language models are everywhere, and the buzz around AI agents is growing louder every day. Many people claim that AI will replace our jobs. We can already see early indications of these discussions taking place among industry leaders. For example, Goldman Sachs CEO David Solomon highlighted that AI can be used to draft 95% of an IPO prospectus, potentially replacing highly paid employees. Similarly, Klarna claims to have replaced 22% of its workforce with AI, and Salesforce is reportedly debating the necessity of hiring additional software engineers in 2025 due to AI contribution to developers’ productivity.
🧐 Efficiency vs. Uncertainty
AI employees offer clear advantages. They reduce costs (compared to human workers), remain available 24/7, and work without breaks. AI can deliver high-quality outputs at scale and often exceeds human precision in specific tasks. Beyond replacing existing roles, AI Agent favorable unit economics can also unlock opportunities for entirely new categories of work—tasks and innovations that were previously unfeasible due to cost or resource constraints.
While we don’t know how accurate or immediate these claims are, we’re confident that AI and LLMs are going to reshape the labor market. AI won’t completely replace certain roles, but it will change how we work. The pace, required skills, employee evaluation, and the very nature of these jobs. There are natural objections to this vision such as academics and researchers who question the maturity of AI, professionals who are likely to lose their jobs (and unions), as well as naysayers, who may be right short term but are more than often wrong long term.
🤖 Why We Believe AI Will Reshape Work
The skeptics might be right, and there’s always a chance that AI will hit a wall, leaving the labor market relatively unchanged. At Entrée Capital, we believe there’s a high likelihood of a different scenario—one where LLM-based applications fundamentally reshape the labor market.
In this scenario, we’ll see a new wave of products, some positioned as “AI co-workers” and others as advanced SaaS platforms with AI Agents, that will significantly reduce the need for developers, operations staff, content creators, marketing professionals, and many others. And this shift might not be as far off as some believe.
This prediction is rooted in three key observations:
⚒️ The Historical Pattern of Technological Disruption
Throughout history, countless roles have been eliminated or transformed by technological advancements. Swordsmen and bowmen, were replaced by firearms and other innovations. Blacksmiths lost to mass production and Telegraph operators were displaced by more advanced communication technologies.
If roles like these—some of which were widespread or integral for decades—could be replaced, it’s difficult to argue that modern roles like data scientists, which have only existed for a few decades, are immune. History teaches us that most jobs are temporary, and technological change is inevitable. And the rate of change is only increasing.
📈 The Rapid Progress of LLM Technology – Eyes on the Trend
While it’s tempting to focus on the current performance of LLMs, the real story lies in the trend. Over the past two years, the landscape of LLMs has evolved dramatically and they are improving rapidly. LLMs’ supporting infrastructure—data centers, vector databases, chips, and integrations has matured at an astonishing rate. It is reasonable to expect that continued advancements in LLM capabilities, speed, cost, their ability to handle increasingly complex tasks, and ultimately operate as another team member within companies.
🚀 The Role of Startups in Closing the Gap
LLMs alone won’t replace jobs. The real transformation will come from startups building products that rely on these models while addressing the limitations of the models themselves. From better integrations to contextual understanding and enhanced user interfaces, these startups will create applications that fundamentally change how work gets done.
This ecosystem is still young. Most of the “LLM startups” were established in the past year, and they are now building MVPs and deploying to first clients. The products we’ll see in the next few years will further accelerate this shift, creating tools that reshape the labor market in ways we can only begin to imagine, going beyond the mere raw capabilities of LLMs as we know them.
🌱 Backing the Future’s Innovators
As an early-stage VC, we find this space to be one of the most exciting and promising areas for innovation. The combination of LLMs, emerging startups, the ongoing evolution of AI products and founders with a big-problem-solving mindset, presents an unprecedented opportunity. Entrée Capital’s focus is on partnering with exceptional founders who are tackling this challenge.
