AI Efficiency Gains Spur New Competition And Restore Jobs

now turns out there is a lot to do at businesses, and generally there are already competitors, meaning employees instead get good at using AI and do more things, and nothing bad ever happens

i just wanted to spell out worst case, which is still a good scenario for everyone

it's like restaurants. if everyone started tipping 500%, the business owner and the waiter don't get a dollar richer in the long run, it will just open 5 more restaurants

@thiagoTF competition is the ONLY thing pushing prices down and that creates innovation

it's arguably the only reason humans have a significantly better life standard than 300 years ago

@gabriel1 Doesn't this only happen if the market grows?

@adityarjn_ this IS how they grow

@gabriel1 yeah this the sort of economical wizardry that makes up all my arguments for supporting capitalism. efficiently, smart run companies create wealth, create jobs, and bring prosperity

iow, abundance

@pinkman_ai @gabriel1 So, the path is to compound efficiency gains faster and use it as a moat against new market entrants, as long as leading company doesn't slack off, that is they continue to have higher rate of efficiency gain, they are going to be Rockefeller of that niche.

@gabriel1 If company A fired half of their employees on the task, while company B is aiming at the same space, B could also use AI for this specific task instead of human employees

@gabriel1 Those are very low level economic thoughts. It’s been hard proven that business doesn’t compete on prices anymore. Also doesn’t matter the size of the business. Anyway I hope this was a rage-bait tweet 😅

@gabriel1 the model works until the efficiency gains compound faster than new markets can absorb the displaced workers, which is the part nobody wants to model out

@gabriel1 In some cases yes but competition isn’t perfect even in situations where it theoretically could be. Indeed, if it was there would be no niches for new companies to fill. Furthemore, company A could have an insurmountable moat.

@gabriel1 Is this not what is happening in frontier labs

@gabriel1 AI looks like an excuse to fire low performers from A. And those people are unlikely to boost company B

@gabriel1 yes, i think due to this, it will take some time for jevons paradox kicks in.

@gabriel1 lol ok so the 5 empkoyees get rehired by company b who also undercuts company a on price. congrats you invented competition. still waiting for the part where this makes the world better tho.

@gabriel1 Works on paper... Company B also uses AI and hires 2 not 5.

@gabriel1 healthy competition if you ask me

@gabriel1 Sounds like the space will get crowded and thin out margins after a few halving cycles 🤣

@gabriel1 the real world version where nobody gets fired and everyone just gets better at their job is somehow the scenario people argue against most

@gabriel1 i dont umderstand the companies that do this. dont fire your employees and instead increase your companies productivity and profits by 100% its just greedy behavior and it is jeopardizing growth