Recently, Palantir – a tech corporation that boasts no fewer than five billionaire executives – announced its Q2 earnings: over a billion dollars generated in a single quarter. Forty-eight per cent growth in its business compared with the same quarter last year, including 93% growth in its US commercial business. These elephantine numbers are maddening – and, in large part, a result of the company fully embracing AI.
The AI revolution is here and, as its proponents remind us daily, it will remake our world, making every company and government agency more efficient and less error-prone while helping us unlock hitherto unheard of advances in science and technology. Not only this, but if we play our cards right, big tech’s latest explosion could yield unprecedented economic growth.
Though, we might ask, growth for whom?
Consider OpenAI, the technology giant behind ChatGPT. In a promo video announcing the latest upgrade for their flagship software, its CEO, Sam Altman, bragged: “It can write an entire computer program from scratch.” Three days later, the New York Times reported that computer science grads “are facing some of the highest unemployment rates” among their peers. And it’s not just coders and engineers. AI-powered automation promises to swallow up jobs at the low end of the labor market too, with McDonald’s, Walmart and Amazon all clamoring to integrate AI tools to automate everything from service interactions to warehouse picking and sorting.
As ex-ante reward for all these cost-cutting layoffs, the fortunes of AI entrepreneurs have ballooned beyond all comprehension. So far, if the AI revolution has succeeded in anything, it is in making very rich people even more rich. Rallies on Wall Street have seen AI stocks surge at a record pace for hundreds of so-called “unicorns” – the nearly 500 AI startups that are valued at more than $1bn each. According to Bloomberg, 29 founders of AI companies are now newly minted billionaires. And remember, nearly all of these firms were founded in the last five years.
Why are investors so bullish on the AI boom? Partly because this technology promises to lay off more workers, more rapidly, than any innovation in recent memory. The ludicrous valuations of AI startups are predicated on the idea that this technology has the power to eliminate the very need for human labor. And the business of layoffs is very lucrative. In that sense, the AI boom could represent the most efficient upward redistribution of wealth in modern history.
To be sure, some AI wizards insist the fallout from all of this won’t be so bad for the little guy. Microsoft even predicts that blue-collar workers might have an edge in the AI economy of the future. But none of this is very convincing. Some workers with durable skills will be able to hold on to good wages and stable work for a time. But with breakthroughs in self-driving cars, increasingly roboticized warehouses, lights-out factories and fully automated…
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