For much of the past two years, the conversation around artificial intelligence has centered on one fear: that machines would soon start replacing white-collar workers at scale. But new labor market data suggests something very different may be happening.
Instead of disappearing, many tech jobs appear to be coming back. According to a new analysis from Citadel Securities, job postings for software engineers are “rapidly rising” and are now up about 11% year over year.
Tech Hiring Rebounds Despite AI Anxiety
The data, based on job postings tracked by job site Indeed, shows a clear rebound in demand for software engineers even as companies pour massive investments into artificial intelligence.
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The broader job market has remained relatively steady as well. Citadel Securities added that the unemployment rate recently printed at 4.28%, a level that still signals a resilient labor market.
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At the same time, companies are spending aggressively on AI infrastructure. Citadel Securities estimates that AI capital expenditures have reached about 2% of U.S. GDP, or roughly $650 billion. Commodities tied to the AI boom have surged too, with “AI-adjacent commodities” up about 65% since early 2023.
Despite the narrative that AI will eliminate large numbers of jobs, the firm argues the data doesn't support that view.
“In spite the current displacement narrative – job postings for software engineers are rising rapidly,” the report said.
The hiring trend comes as the U.S. prepares for a massive buildout of computing infrastructure. Almost 3,000 data centers are currently planned across the country, according to data analytics company Aterio, which is also boosting employment in construction and related industries.
AI Adoption Still Moving Slowly
Another reason mass job displacement hasn't appeared yet is that AI adoption is still developing gradually inside workplaces.
Data from the St. Louis Fed's Real-Time Population Survey released in November shows more people were experimenting with generative AI tools, but daily use for work remained relatively stable at just under 40%.
Citadel Securities argues that the key question isn't simply whether people have tried AI, but how often they rely on it to perform their jobs.
“The more important question insofar as it relates to the AI displacement narrative is: how intensely is AI being used for work?” the report said.
So far, the numbers show little evidence of a sudden shift. The share of workers using generative AI every day for their jobs remains relatively low, suggesting companies are still figuring out how to integrate the technology.
Productivity Shock, Not Economic Collapse
Rather than triggering mass unemployment, the firm argues AI may end up functioning more like earlier technological revolutions.
Historically, technologies such as electricity, computers and the internal combustion engine boosted productivity, lowered costs and expanded economic output.
In many cases, they also created entirely new industries and business models.
That possibility is already visible in another piece of data highlighted in the report: a surge in new business formation.
Applications to start new businesses in the U.S. have risen sharply over the past decade, reaching levels far above those seen in the early 2000s. In January, there were 532,319 new business applications, an increase of 7.2% compared to December, per the U.S. Census Bureau.
According to Citadel Securities, that trend could reflect the emergence of new economic opportunities created by digital tools and automation.
The firm also points out that fully replacing large numbers of workers with AI would require enormous computing resources, energy and infrastructure. If the cost of running those systems rises above the cost of human labor for certain tasks, companies have little incentive to automate them.
“It seems more likely that AI will be a complement rather than a substitute for labor in many areas,” the report said.
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