BOSTON, July 8, 2025 — Software engineering platform Jellyfish published the 2025 State of Engineering Management report, which measures the impact of AI coding tools on engineering work — from day-to-day workflows to large-scale organizational priorities. The sixth annual report provides an update on how engineering teams are adopting AI, which coding tools they’re deploying, how they’re paying for their AI investments, among other findings.
According to the research, engineering teams are achieving substantial increases in developer velocity and productivity via AI coding. Software engineers are united in one area — the embrace of AI coding tools — but split on where the budget for those tools should come from and how AI stands to impact their productivity moving forward. Notably, 45% of respondents anticipate offshoring as a percentage of their engineering headcount to increase over the next year.
Findings from the report include:
Adoption of and trust in AI has spiked: Overall, 90% of teams are embracing AI coding tools to augment their engineering practices, a significant increase from last year when 61% of respondents said their engineering organizations had embraced AI. Only 3% are not using AI tools with no plans to do so.
AI is driving real impact: Six in 10 (62%) respondents believe they are achieving at least a 25% increase in developer velocity and productivity via AI coding. Less than 1% of respondents believe AI is slowing them down.
When it comes to AI, code writing is leading the charge: The most popular use case for AI coding tools is writing code. GitHub Copilot is the tool of choice for 42% of respondents, followed by Google’s Gemini Code Assist, Amazon Q and Cursor.
The future will be a hybrid of humans and AI: Long-term, respondents expect a significant portion of software development work to shift from people to AI. Eight in 10 (81.4%) respondents believe that at least 25% of the engineering work humans do today will be handled by AI five years from now.
Companies continue to invest in engineering: Six in 10 (61%) respondents said their engineering budget increased as a percentage of company revenue from 2024 to 2025, compared to 19% who said it remained the same and 17% who saw a decrease.
Jellyfish surveyed 645 full-time professionals globally, in various engineering roles, including individual contributors, managers, and executives. Respondents — representing companies ranging from small engineering teams with fewer than 10 people to enterprises with more than 500 engineers — gave their thoughts on AI, engineering investment, and metrics.
“Adopting AI in software engineering is no longer optional, but unlocking its full value requires more than access to coding tools,” said Andrew Lau, CEO and co-founder of Jellyfish. “It requires intentional measurement, structured enablement, and cultural investment. This is not a tooling upgrade — it’s an organizational transformation.”
