The recent changes to the U.S. tax code, specifically Section 174, require that software development costs must be amortized over five years rather than being immediately deductible. This creates a significant tax burden for startups, especially those that are cash-strapped or not yet profitable. Many commentators express concern that these changes could lead to widespread layoffs in the tech industry, as companies grapple with increased financial strain during a period of high-interest rates and dwindling venture funding. There's a growing sentiment that these regulations disproportionately disadvantage new tech firms compared to established companies, potentially stifling innovation and entrepreneurial growth in the sector. Observers are waiting to see if proposed legislation to overturn this provision in the Big Beautiful Bill will pass through the Senate in time to mitigate these issues.