Missing a Step

According to Fortune magazine, Amazon and Microsoft are spending $400 billion on AI—and investors are low on patience. Patience for what, I wonder. The article notes that investors may be looking to understand which, between Microsoft and Amazon "soak up all that investment and spin it into gold faster," but it never gets into how this spinning would actually work.

And that seems to be the importance piece. If one presumes that there actually is an "AI Layoff Trap" as Professors Gerry Tsoukalas and Brett Falk lay out in their recent paper, there won't be much gold to go around, as the rush to replace people with automation grinds its way through corporate customers, crashing demand for most non-essential items. While people like Elon Musk have apparently convinced themselves that ubiquitous automation will rapidly usher in a post-scarcity economy, the techo-optimists, or at least the articles that lay out their positions, end to also be short on details as to exactly how this will come about.

I'm really bad at predicting the future, and so I don't claim to have much insight into how things will turn out. I've just learned to be skeptical of claims that the world will suddenly undergo radical change when the mechanism for such change can't really be identified.

For the hundreds of billions of dollars being put into generative automation to pay off, it has to create something that allows people to sustain themselves and an economy that relies heavily on discretionary purchasing. Right now, it doesn't appear to be doing that, and while hope that this will change may be common, that hope is going to have to be realized before there can be any sustainable return on that investment.