global gdp is over 100 trillion. Something like 50-60% is paid to labor. If you assume AI takes a good chunk of labor, the market is gigantic. Really really really gigantic.
If people don’t get work they stop buying things. If people don’t buy things, companies don’t make money. If companies don’t make money they won’t buy — or have a reason to buy —- AI companies’ services.
You cannot eliminate a significant chunk of labour cost without causing demand collapse. People saying that there is money in eliminating labour costs at that scale are not doing the whole of the calculation.
Like agriculture. That market has grown significantly through time, even though it's shrunk dramatically as a % of GDP.
AI cannot make money as an alternative to large scale employment, because essentially all the clients of those AI businesses will see demand for their products and services collapse. AI bots don’t go to In-N-Out Burger or Disneyland.
Anything else is fantasy maths, albeit commonplace fantasy in the AI industry at the moment.
Here you are talking about a shift taking employment out of the economy full stop — taking the money that would have gone to "a good chunk of labor", to use your words, and giving it to AI firms.
You are necessarily talking about job elimination en masse — it's the only way this hypothetical source of money is available.
If you take labour out of the market, en masse, you cause demand to collapse. Because they won't be economically active!
New industry after new industry has been created over the past 100 years. It's difficult to believe that all of a sudden that stops.
Henry Ford said he needed to pay his workers enough that they could afford his cars.
It's the same as if you had taken half their jobs and forced everyone into underemployment through job sharing.
Your formulation forswears them finding replacement jobs because the money will have gone to AI companies instead, and it necessarily implies people having less money to spend.
From your headline number you’d have to deduct non-knowledge work though.
You’d also have to take into account the fact that while AI can often replace some tasks, it’s often not enough to replace the entire worker.
For the high end knowledge worker jobs the corresponding token costs could be higher than the cost of wages.
Given the demand you describe, would it even make a difference whether you invested in OpenAI or Anthropic?
But without labor the entire economy also collapses into a singularity beyond which nothing really makes sense anymore, so there's that.
Much smaller rates of unemployment have worsened stagflation cycles due to various policy traps we are certainly not immune to repeating.