> But will it?
My prediction is no, because productivity gains must benefit the lower classes to see a multiplier in the economy.
For example, ATMs being automated did cause a negative drop in teller jobs, but fast money any time does increase the velocity of money in the economy. It decreases savings rate and encourages spending among the class of people whose money imparts the highest multiplier.
AI does not. All the spending on AI goes to a very small minority, who have a high savings rate. Junior employees that would have productively joined the labor force at good wages, must now compete to join the labor force at lower wages, depressing their purchasing power and reducing the flow of money.
Look at all the most used things for AI: cutting out menial decisions such as customer service. There are no "productivity" gains for the economy here. Each person in the US hired to do that job would spend their entire paycheck. Now instead, that money goes to a mega-corp and the savings is passed on to execs. The price of the service provided is not dropping (yet). Thus, no technology savings is occurring, either.
In my mind, the outcomes are:
* Lower quality services
* Higher savings rate
* K-shaped economy catering to the high earners
* Sticky prices
* Concentration of compute in AI companies
* Increased price of compute prevents new entrants from utilizing AI without paying rent-seekers, the AI companies
* Cycle continues all previous steps
We may reach a point where the only ones able to afford compute are AI companies and those that can pay AI companies. Where is the innovation then? It is a unique failure outcome I have yet to see anyone talk about, even though the supply and demand issues are present right now.
My prediction is no, because productivity gains must benefit the lower classes to see a multiplier in the economy.
For example, ATMs being automated did cause a negative drop in teller jobs, but fast money any time does increase the velocity of money in the economy. It decreases savings rate and encourages spending among the class of people whose money imparts the highest multiplier.
AI does not. All the spending on AI goes to a very small minority, who have a high savings rate. Junior employees that would have productively joined the labor force at good wages, must now compete to join the labor force at lower wages, depressing their purchasing power and reducing the flow of money.
Look at all the most used things for AI: cutting out menial decisions such as customer service. There are no "productivity" gains for the economy here. Each person in the US hired to do that job would spend their entire paycheck. Now instead, that money goes to a mega-corp and the savings is passed on to execs. The price of the service provided is not dropping (yet). Thus, no technology savings is occurring, either.
In my mind, the outcomes are:
* Lower quality services
* Higher savings rate
* K-shaped economy catering to the high earners
* Sticky prices
* Concentration of compute in AI companies
* Increased price of compute prevents new entrants from utilizing AI without paying rent-seekers, the AI companies
* Cycle continues all previous steps
We may reach a point where the only ones able to afford compute are AI companies and those that can pay AI companies. Where is the innovation then? It is a unique failure outcome I have yet to see anyone talk about, even though the supply and demand issues are present right now.