Reed Hastings says AI may push CEOs to cut their workforce in half — or expand their reach

Netflix cofounder Reed Hastings says CEOs could soon face critical decisions if generative AI continues to rapidly improve. “You could either cut your workforce in half and stay in the same business lines, or you can use all these new resources to expand against your competitors,” Hastings said during an interview for Semafor’s “The CEO Signal” podcast.

Hastings, who sits on Anthropic’s board of directors, said that in five years, frontier models will be 32 times better than today.

If that pace continues, which is not guaranteed but is something many in the industry expect, “then in 10 years, that’s a thousand times better.” “What do CEOs have to do?

It’s like doubling your workforce,” he said.

Many companies, Hastings said, will take it as an opportunity to try to gain a leg up on their competition. “You’re going to see a lot of companies attacking each other, which is the great act of creative destruction,” he said. “And because it’s gotten easier and easier to make software and soon will be easier to make everything.” Hastings said all of society, including the C-suite, isn’t ready for what AI will do if the pace of advancement continues. “I think most humans are underestimating what doubling every year that’s an exponential rate of improvement is going to do,” he said.

The Netflix cofounder also dismissed concerns that only large companies like the entertainment giant he helped create will truly thrive with AI.

Larger companies are better suited to funding the high costs of widespread, intensive AI use, though that gap may narrow if AI usage costs decline, as some industry analysts expect.

After leaving Netflix’s board of directors in June, Hastings is devoting his time to Powder Mountain, a Utah ski area, parts of which he’s turning into a luxury, members-only ski community. “I think sometimes the small companies are the most innovative and will be the most aggressive users of AI to unlock various scenarios to compete with their competitors,” he said. “So it varies quite a bit.” Instead, Hastings said it’s CEOs like himself who will determine which companies will benefit the most from AI. “I think it’s more attitudinal than the size of the firm, and certainly depends on the applicability of it,” he said.

Hastings said he’s using AI “all the time” both to expand his own knowledge and to create better experiences for Powder Mountain’s members. “I’m asking AI to teach me how ski lifts work, how sewer systems work, what property developments have worked and why,” he said. “So I’m the student for so much of the AI session.

And then we’re using AI to improve the software in the place.”