2 AI job trends and the labor market, what pizza orders reveal about the state of the US consumer

Key Concepts

• AI Disruption to Work and Labor Market: The impact of Artificial Intelligence on job creation and destruction, and the evolving skills required.
• Demand for Human Touch: The continued importance of human skills like creativity and critical thinking in an AI-driven world.
• AI Literacy: The growing necessity for businesses and individuals to understand and utilize AI effectively.
• Fractionalization of Jobs: How AI automates specific tasks within a job, rather than eliminating entire roles.
• Cyber Resilience: The importance of preparing for and recovering from cyberattacks, especially in the context of AI adoption.
• Rubric Agent Cloud: A platform designed to monitor, govern, and rewind the actions of AI agents.
• Cautious Consumer: Consumers reducing spending and opting for more affordable options due to economic anxieties.
• Food Inflation: The significant increase in the cost of ingredients impacting the food industry.
• GLP-1 Medications: The potential impact of weight-loss drugs on food consumption patterns and menu development.

AI Disruption to Work and the Labor Market

Anthony Capus, COO of Upwork, discussed the evolving relationship between AI and labor demand, highlighting two durable trends observed over the past four months.

• Net New Demand for AI Skills: AI is directly creating new job opportunities in fields related to its development and implementation.
  • Machine Learning: Demand increased by 16%.
  • Quality Assurance Engineering Testing: Demand rose by 19% in November. Capus explained this surge is consistent with the need for human oversight to ensure AI-generated code is accurate, bug-free, and meets intended objectives, indicating AI's current limitations in full reliability.
• Durable Demand for Creative Skills: Beyond technical AI roles, there is significant and consistent demand for human creativity, which complements AI outputs.
  • Graphic Design: Identified as the number one AI-related skill in November.
  • Video Editing: Related skills ranked within the top three of the top 10 skills.
  • Capus emphasized that this "layer of human creativity at the end of what AI can produce" is highly valued.

AI Literacy and Value of Human Touch:

• A survey of businesses revealed that 85% consider AI literacy increasingly important. This metric has risen significantly from the mid-50s in August.
• Capus explained that AI literacy signifies the ability to interpret and integrate AI-generated content (code, video, marketing copy) into real-world applications.
• Independent talent possessing these AI-enabled skills earns approximately 40% more than those without.

The Future of Work with AI:

• Capus expressed optimism that AI will create "net new jobs" that don't currently exist, citing "generative engine optimization" (the successor to SEO) as an example.
• He acknowledged the "fractionalization of jobs," where AI can automate rudimentary or entry-level components of a role. However, he stressed that the "last layer, that human touch," will continue to hold tremendous value.
• For individuals seeking to future-proof their careers, Capus advised focusing on skills that can "move human emotion," such as in marketing copy, video, or audio, as these areas demonstrate clear and growing value. He noted that developing these skills can be relatively quick, and the demand is dynamic, with the top skills list changing monthly.

Cyber Security Firm Rubric's Performance and AI Agent Security

Bitle, CEO of Rubric, discussed the company's strong third-quarter results and their strategy for navigating the AI landscape.

Blockbuster Results and Guidance:

• Rubric reported a "record quarter," exceeding all guided metrics and raising their annual outlook.
• This success is attributed to cyber resilience and AI transformation.
• The CEO stated, "What is happening in the marketplace is everybody is now rushing to prepare for the AI future. They are modernizing their infrastructure. They are doing cloud transformation. They are deploying agents and they have to manage cyber risk because cyber attacks are inevitable."
• He emphasized that data integrity and availability are crucial for AI's usefulness, driving demand for Rubric's solutions.

Financial Highlights:

• Subscription ARR (Annual Recurring Revenue): Grew 34% year-over-year to $1.35 billion.
• Free Cash Flow: Generated $77 million, representing a 22% margin.
• Bitle highlighted that the company is achieving both rapid top-line growth and disciplined operational management.

AI Agents and Security Concerns:

• Bitle addressed the rapid development of AI agents, stating, "agents without the guard rails and a way to govern is not safe." He likened it to hiring thousands of employees without oversight, leading to potential chaos.
• Rubric Agent Cloud: To address these risks, Rubric launched this new platform. Its focus is on:
  • Monitoring agents: Tracking their activities.
  • Governing agents: Establishing and enforcing rules.
  • Rewinding actions: The ability to undo agent misbehavior due to cyber threats or hallucinations.
• This platform aims to enable customers to accelerate their AI adoption with confidence.

AI Agents in the Hands of Threat Actors:

• Bitle acknowledged the dual nature of AI agents, noting that "the bad guys have the agents too."
• He stated on a conference call that AI agents in the hands of threat actors could inflict 10 times more damage in one-tenth of the time.
• Rubric's core thesis is that "you can't prevent the unpreventable." Therefore, the strategy involves:
  • Prevention and Detection: Investing in these areas.
  • Assuming Attacks Will Happen: Focusing on ensuring services remain operational.
  • Understanding Risk and Remediation: A comprehensive strategy provided by the Rubric Security Cloud platform and Rubric Agent Cloud.
• The Rubric Agent Cloud ensures agents operate within established parameters, whether they are read-only, read-write, or have specific communication restrictions.

Perspective on AI Models:

• Bitle uses Gemini and other models regularly and is encouraged by Google's rapid advancement.
• He believes there will not be a single "winner" in AI models, but rather different models optimized for different use cases.
  • Anthropic: Emerging as a strong coding platform with high enterprise adoption.
  • OpenAI: Has garnered significant consumer traction.
• This mirrors the hardware industry, where various server providers (HP, Dell, IBM) serve distinct purposes.

Lessons Learned as a Public Company:

• Bitle expressed satisfaction with Rubric going public, believing that building a long-term company requires balancing short-term results with a long-term strategy and vision.
• He stated, "I personally believe that if you want to build a long-term company, you need to have two conflicting ideas in your head. One is about delivering short-term results quarter after quarter. While focus on long-term strategy and vision to continue to evolve the company and and and the industry."

The Cautious Consumer and Food Inflation

Haki Octennis, founder and CEO of Champion Pizza, discussed the impact of economic conditions on consumer behavior, particularly within the pizza industry.

Trend of Downsizing and Reduced Spending:

• Octennis confirmed a trend of consumers ordering smaller pizzas, opting for fewer toppings, and skipping sides.
• He shared a personal anecdote of a customer who, upon seeing the cost of a large pizza with four toppings (approximately $41), decided to only order pepperoni.
• This behavior is attributed to a combination of factors, including:
  • Inflation: Rising costs of goods and services.
  • Economic Anxiety: Consumers feeling worried about their financial situation.
  • Affordability Issues: Difficulty in affording discretionary purchases.

Impact of Food Inflation:

• Octennis highlighted significant increases in ingredient costs:
  • Pepperoni: The price for 10 pounds has risen from $30 to $130-$140.
  • Imported Organic Tomato Sauce: The cost has jumped from $15-$16 to $75.
• He noted that while ingredient costs have tripled, pizza prices have not increased proportionally, as businesses try to absorb some of the costs to remain competitive and empathetic to consumer struggles.
• He stated, "Be honest, you know, like the price, you know, like I mean back in the day like cheese slice was 250. Today is still $ 250. So, you cannot like, you know, like 250 jump to $10. You cannot do that. You know, you have to have a heart for other people feeling."

Navigating Challenges:

• Octennis emphasized the need to understand and empathize with customers' financial situations, especially for single mothers and those struggling to afford basic necessities.
• He acknowledged the difficulty of the current economic climate, stating, "life is very very tough man."

GLP-1 Medications and Menu Adaptation:

• Octennis was asked about the trend of GLP-1 medications and whether pizza businesses are adapting menus (e.g., lower calorie, higher protein, cauliflower crust).
• He expressed a personal preference for traditional pizza, viewing it as inherently not unhealthy when baked, with healthy components like tomato sauce and calcium-rich cheese.
• He stated, "So like the cauliflower crust I don't want to like against him like but that's not me. It's not for you." This suggests a focus on his core product rather than catering to niche dietary trends driven by medication.

Personal Pizza Preference:

• When asked about his go-to pizza, Octennis mentioned Margherita pizza as his favorite. He also enjoys visiting Lombardi's, one of the oldest pizzerias in New York City, for their Margherita. At his own establishments, he typically orders cheese or Margherita.