> I can imagine conversations playing out today, "we need to hire more developers" with the rebuttal, "ok, what about AI? Let's see how far it will go without hiring more people"

That is almost certainly happening. What needs to play out for the pendulum to swing the other way is all of these companies realizing that their codebase has become a bunch of AI-generated slop that nobody can work on effectively (including the AIs). Whether that plays out or not is an open question: how much slop can the AI generate before it falls over?