When the bubble pops - How AI will destroy the economy
How exactly will AI steal your job? And what will it look like when unemployment skyrockets?
AI is hyped. It is hyped to be able to do all of our tasks much more efficiently than most humans could, very rapidly erasing the need for human labor. The collateral damage? The entirety of the working class. The mass layoffs across the tech sector serve to prove this point. The labor cuts are no longer counted in numbers, but in percentages.
If this is truly a systemic trend, then the mass increase in unemployment is irreversible. AI will wipe out the working class as a whole. If that happens, tens of millions of people will be left without income. Income they’d need to buy goods, services and assets. The prices of assets will fall because the retail won’t have the money to spend on them. Profits will fall, leading to the stock market crash, pulverizing incomes and net worth of millions. The economy as we’ve known it for decades will be destroyed.
The reason the AI Bubble will pop is not mass layoffs and the economic consequences thereof. Those glorified text predictors aka LLMs simply can’t meaningfully replace workers on a larger scale. The AI Bubble will pop because the technology is a hype, an unsustainable fantasy and the enormous amount of money speculatively pumped into the companies involved will vanish and drag the economy down with it.
AI Boosters and AI Doomers are two sides of the same coin: Both assume that AI technology is about to become insanely powerful. That’s why Altman and his billionaire friends have no problem speculating about mass job loss or the impending end of humanity through AGI. Both sides serve to fuel the hype and this obscures a third possibility: That LLMs are limited in what can be done with them and relying on them to fulfill a promise to actually replace humans might very likely be a dead end. A collective realisation that those lofty promises are just the equivalent of pulling a rabbit out of a hat is what will burst that bubble.