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The State of AI Software Development: Aug 2025

by Shaun Kahler

There are so many apps on Hugging Face right now using some form of AI to do some kind of thing. I don't think you understand — these are all open source, free apps that you can literally check out right now.

When you start to put the picture together, you kind of get the sense like... Is there really anything new under the sun?

Or at least on the surface.

Like GitHub, what you kind of see when you start to dig in is that a lot of these apps are created by individual users.

And individual users have a bit of an Achilles heel — getting truly "to the finish line" can be quite difficult.

Let's say this were a Monte Carlo simulation of a bunch of race cars on a track.

We're talking out of hundreds and thousands of people, you get maybe just a select few that are really truly creating something that's polished, useful, and interesting.

So what does this mean for the software development world?

What this means is that there's a gap: a gap that exists between Step A — taking the motivated software developer who does in fact create and post — and Step B, which is aligning said developer into a funded team that can create polished products - a gap has software development paying anywhere from $4/hour from outsourced companies all the way to $300,000–$500,000/year for developers in FAANG companies.

What other industry looks like this? Realistically?

With a true median at $120K?


The state of software development is changing extraordinarily fast, and it's been this way for the past 2½ years.

According to Revelio Labs, software developer listings are down 70% over the last 2 years. And Indeed is showing roughly 65% fewer software developer postings since 2020.

So what then. Is the industry dying?

Certainly an argument could be made when you combine this with the current direction of AI models. ChatGPT just released an agent that runs freely on a remote desktop and accomplishes browser-based tasks. In addition, you've got models coming out like GPT-5 — long anticipated — a model that even Sam Altman himself claims is concerningly above his expectations.

So. If we summarize here, we get this:

  • An abundance of AI-based apps with simple functionalities produced by solo developers
  • A 65% fall in software development postings since 2020
  • AI which can write code in increasingly higher amounts, accuracy, levels of detail, and complexity over the last 2.5 years
  • Startup funding which is still driving private sector R&D
  • A shortage of truly polished products

In other words:

We are still being left with a gap - a gap between polished product and unfinished product. It's not necessarily the products that we're seeing less demand for — if anything, there's even higher demand for polished products that can do what we want, now that the future is beginning to unleash itself.

However, the overarching theme here is that there seems to be less demand for individual developers overall. This explains why you've got a sort of "everything's okay" vibe at the very top with companies carrying on as usual, and a sheer abundance of developers (or "vibe coders" as some like to say) who seem to be trying to build their own software at the moment.


A solution for this problem exists.

Perhaps it could be interesting to create a platform that creates teams of software developers — individual developers — who show interest in building certain types of apps.

Not just a social media for developers, but pairing algorithms that help people find technologies that are being developed, and get them on those teams.

Teams are how polished products are created. Getting funding is not just about creating functionality — it's about creating something that a user truly wants and truly likes, which means UX, UI, marketing, hype, and the whole nine yards.

A platform that VCs can throw cash at, create ideas for, and more — and that developers can simply join and earn on by accomplishing tasks.

Not something like Upwork, where clients are burdened by the task of managing projects, teams, and more — but an instantaneous reward system for wandering developers to produce results on big projects.

This leverages the current supply of developers, overcomes the problem of teaming and polish, and creates a revenue stream for developers while streamlining the VC R&D machine.

Thoughts?

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