[pizzly]

I think OP's thesis should be expanded.

-AI is leading to cost optimizations for running existing companies, this will lead to less employment and potentially cheaper products. Less people employed temporary will change demand side economics, cheaper operating costs will reduce supply/cost side

-The focus should not just be on LLM's (like in the article). I think LLMs have shown what artificial neural networks are capable of, from material discovery, biological simulation, protein discovery, video generation, image generation, etc. This isn't just creating a cheaper, more efficient way of shipping goods around the world, its creating new classifications of products like the microcontroller invention did.

-The barrier to start businesses is less. A programmer not good at making art can use genAI to make a game. More temporary unemployment from existing companies reducing cost by automating existing work flows may mean that more people will start their own businesses. There will be more diverse products available but will demand be able to sustain the cost of living of these new founders? Human attention, time etc is limited and their may be less money around with less employment but the products themselves should cost cheaper.

-I think people still underestimate what last year/s LLMs and AI models are capable of and what opportunities they open up, Open source models (even if not as good as the latest gen), hardware able to run these open source models becoming cheaper and more capable means many opportunities to tinker with models to create new products in new categories independent of being reliant on the latest gen model providers. Much like people tinkering with microcontrollers in the garage in the early days as the article mentioned.

Based on the points above alone while certain industries (think phone call centers) will be in the red queen race scenario like the OP stated there will new industries unthought of open up creating new wealth for many people.

[chongli]

Red Queen Race scenario is already in effect for a lot of businesses, especially video games. GenAI making it easier to make games will ultimately make it harder to succeed in games, not easier. We’re already at a point where the market is so saturated with high quality games that new entrants find it extremely hard to gain traction.

[franktankbank]

Imagine a giant trawling net scooping up the last two-three decades undeprecated of work on the web/data/game/operating system space and cutting out the people who did all that work. What do you think is going to happen to the progression in those areas? I guess it was "done"? The LLM AI is only as good as its input, as far as I can tell there is no reason to believe any of its second order outputs. RLHF is an interesting plug for that hole but its only as good as the human feedback and even then those things taken to second order aren't going to be any good. This collapses the barrier to entry to existing products, aka those people are going to be swamped with new competition.

[autoexec]

> AI is leading to cost optimizations for running existing companies, this will lead to less employment and potentially cheaper products.

There's zero change that cost optimizations for existing companies will lead to cheaper products. It will only result in higher profits while companies continue to charge as much as they possibly can for their products while delivering as little as they can possibly get away with.