Maximizing Gain in the Age of AI: Human Labour Has No Chance
The pursuit of profit remains the primary focus in modern business, despite the potential of generative artificial intelligence.
The allure of generative artificial intelligence (GenAI) may be undeniable, but in the realm of commerce, the pursuit of profit reigns supreme. Despite the promise of GenAI, contemporary business remains driven by the relentless pursuit of maximizing gains.
One might assume that the cost-effectiveness of human labour, coupled with our remarkable proficiency in specific domains, would ensure our enduring competitiveness, regardless of the rapid advancements in GenAI technology. After all, humans are remarkably efficient analogue machines, requiring a mere 150 watts of energy per hour, fuelled by a humble bowl of porridge. This efficiency translates into a global average wage of approximately $5 per hour, with some regions paying as little as $1 per day for certain tasks.
But the landscape is changing.
In this swiftly digitizing world, where our tangible reality is increasingly enveloped by the digital realm, the old paradigms no longer hold. The digital domain introduces a novel set of cost factors for labour:
- The cost of creating information
- The cost of processing information through computations
- The cost of disseminating information
The first stage of global digitalization ushered in the era of microchips, rapidly slashing the cost of computational power by several orders of magnitude. The very first general-purpose programmable computer, ENIAC, surpassed its predecessors by a staggering 5,000-fold, capable of calculating a rocket’s trajectory in a mere 30 seconds, compared to the 30 laborious hours it took humans.
The second stage of digitalization was marked by the advent of the Internet, which revolutionized the way we transmit data across vast distances. Prior to the Internet, data transmission incurred exorbitant costs. Yet, with the Internet’s arrival, sending emails, streaming video, and using cloud services became remarkably affordable. By the early 21st century, the cost of moving a single bit had plummeted to about 2 times 10 to the minus 10th power, making sending 1 kilobyte of data cheaper than a postage stamp. Today, this cost is even more inconsequential.
Now, we stand on the precipice of the third stage of digitalization, heralded by the widespread adoption of GenAI. While the first stage drove computational marginal costs to zero and the second stage did the same for information dissemination, the third stage is poised to obliterate the marginal costs associated with creating information.
Hence, regardless of the cost-effectiveness of human brains and bodies, GenAI promises to be the more economical choice in the digital information age.
For those who remain skeptical, detailed insights can be gleaned from the analytical case presented by venture company Andreessen Horowitz in “The Economic Case for Generative AI and Foundation Models“.
The article was written with the Telegram channel‘s assistance.
Read more about AI:
Any data, text, or other content on this page is provided as general market information and not as investment advice. Past performance is not necessarily an indicator of future results.
The Trust Project is a worldwide group of news organizations working to establish transparency standards.