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The funny thing is it appears we may see a return to the software output from AI being efficient low level code. So while the compute to actually write the software rockets upwards the software itself might broadly become dramatically more efficient again.

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I suppose that is possible, but I have not seen it yet. When I ask an LLM to write code for me, "dramatically efficient" are not the adjectives that come to mind to describe the results. Usually "well, it works" is about as good as I can hope for, and I often don't even get that at least on the first iteration.

on the contrary, AI seems to do better at high level code generation

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