The "AI 2027" Scenario: How realistic is it?

Its a shame that your standard futurologist always the most fancyful.

Talks of exponentials unabated by physics or social problems.

As soon as AI starts to "properly" affect the economy, it will cause huge unemployment. Most of the financial world is based on an economy with people spending cash.

If they are unemployed, there is no cash.

Financing works because banks "print" money, that is, they make up money and loan that money out, and then it gets paid back. Once its paid back, it becomes real. Thats how banks make money (simplified) If there aren’t people to loan to, then banks don't make profit, they can't fund AI expansion.

That's actually my favourite answer to the Fermi paradox: when AI and robot development becomes sufficiently advanced and concentrated in the hands of a few, then the economy will collapse completely as everyone will be out of jobs, leading ultimately to AIs and robots out of a job - they only matter if there are still people buying services from them. People then return to sustenance farming, with a highly reduced population. There will be self-maintained robots doing irrelevant work, but people will go back to farming and a bit of trading. Only if AI and robot ownership would be in the hands of the masses I'd expect a different long term outcome.

Communism here we come!

> Financing works because banks "print" money, that is, they make up money and loan that money out, and then it gets paid back

Don’t forget persistent inflation, which is how they make a profit off printing money. And remember persistent inflation is healthy and necessary, you’d be going against the experts to say otherwise.

> my favourite answer to the Fermi paradox

So, to be clear, you are saying you imagine the odds of any kind of intelligent life escaping that, or getting into that situation and ever evolving in a way where it can reach space again, or just not being interested in robots, or being interested on doing space research despite the robots, or anything else that would make it not apply are lower than 0.000000000001%?

EDIT: There was one "0" too many

AI meaningfuloy replacing people is a huge "what if" scenario still. It is sort of laughable that people treat it as a given.

We really need to establish a universal basic income before jobs are replaced. Something like two thousand a month. And a dollar for dollar earned income credit with the credit phasing out with at a hundred grand. To pay for it the tax code uses GAAP depreciation and a minimum tax of 15% GAAP financial statement income. This would work toward solving the real estate problem of private equity buying up all the houses as they would lose some incentive by being taxed. I'm a CPA and I see so many real estate partnerships that are a tax loss that are able to distribute huge book gains because accelerated depreciation.

It should really be tied to the ALICE cost of living index, not a set, fixed amount.

Unless inflation ceases, 2K won't hold forever. It would barely hold now for a decent chunk of the population

Might I have taken the potential for complete economic collapse because no one's got a paying job any more and billionaires are just sitting there, surrounded by their now useless robots, to the too extreme?

Why wouldn't AI simply be a new enabler, like most other tools? We're not talking about true sentient human-like thought here, these things will have limitations, both foreseen and unforeseen, that only a human will be able to close the gap on.

The companies that fire workers and replace them with AI are short sighted. Eventually, smarter companies will realize its a force multiplier and will drive a hiring boom.

Absent sentient AI, there will always be gaps and things humans will need to fill, both foreseen and unforeseen.

I think in the short term, there will be pain, but overall in the long term, humans will still be gainfully employed, it won't per se look like it does now, much like we saw the general adoption of the computer in the workplace, resources get shifted and eventually everyone adjusts to the new norms.

What would be nice is this time around when there is a big shift, is workers uniting to capture more of the forthcoming productivity gains than in previous eras. A separate topic, worth thinking about none the less.

I keep hearing this and I think it's absolute nonsense. AI doesn't need money or the current economy. Yes, our economy would crash, but they would keep going.

AI-driven corporations could buy from one another, and countries will probably sell commodities to AI-driven corporations. But I fear they will be paid with "mirrors".

But, on the other hand, AI-driven corporations could just take whatever they want without paying at some point. And buy our obedience with food and gadgets plus magic pills to keep you healthy and not age, or some other thing. Who would risk losing that to protest. Meanwhile, AI goes on a space adventure. Earth might be kept as a zoo, a curiosity. (I took most of this from other people's ideas on the subject)

> Don’t forget persistent inflation, which is how they make a profit off printing money.

Ah, well no, high inflation means that "they" loose money, kinda. Inflation means that the original money amount that they get back is worth less, and if the interest rate is less than inflation, then they loose money.

"reasonable" inflation means that loans become less burdensome over time.

However high inflation means high interest rates. So it can mean that initially the loan is much more expensive.

Right, tell that to Sam Altman, Zuck, Gates, Brin & Page, Jensen, etc. Those who control the AIs will control the future.

I think that replace as in company with no employees is very farfetched.

But if "AI" increases productivity by 10% in an industry, it will tend to reduce demand for employees. look at say internet shop vs bricks and mortar: you need far less staff to service a much larger customer base.

manufacture for example, there is a constant drive to automate more and more in mass production. If you compare car building now vs 30 years ago. Or look at raspberrypi production now vs 5 years ago. They are producing more Pis than ever with roughly the same amount of staff.

If that "10%" productivity increase happens across the service sector, then in the UK that's something like a loss of 8% of _total_ jobs gone. Its more complex than that, but you get the picture.

Syria fell into civil war roughly the same time unemployment jumped: https://www.macrotrends.net/global-metrics/countries/SYR/syr...

Dollar is agreement between humans to exchange services and goods. You wouldn't use USD to trade with aliens, unless they agreed to it. Aliens agreeing to USD would mean we have something to offer to them.

In the event of mass unemployment level AI, cash stops being the agreement between humans. At first, cash value of services&goods converge to zero, only things that hold some value are what AI/AI companies care about. People would surely sell their land for 1M$ if a humanoid servant costs 100 dollars. Or pass a legislation to let OpenAI build 400GW data center in exchange for 100$ monthly UBI on top of your 50$ you got from a previous 20GW data center permit.

The service economy will collapse, finance as a whole will collapse, but whoever controls the actual physical land and resources doesn't actually need any of that stuff and will thrive immensely. We would end up with either an oligarchy that controls land, resources and robots and molds the rest of humanity to their whim through a form of terror, or an independent economy of robots that outcompetes us for resources until we go extinct.

AI that drives humans out of workforce would cause a massive disinflation.

And they would pretty quickly realize what a burden is created by the existence of all these people with nothing to do.

> Why wouldn't AI simply be a new enabler, like most other tools?

but it is just another enabler. The issue is how _effective_ it is. It's eating the simple copy-writing, churnalism, pr-Repackage industry. looking at what google's done with the video/audio, thats probably going to replace a whole bunch of the video/graphics industry (which is where I started my career.)

"AI" as in TV AI, might not need an economy. but LLMs deffo do.

Fat chance the Republican Party in the US would ever vote for something like that.

and then they'll deploy their killbots

Its not up to them. If we completely automate hunan labour, capitalism will collapse. Its only a matter of time that people will demand collective ownership of the means of production

A few AI-controlled machine guns will keep that burden far away from them.

What incentives do they have to satisfy people's demands?

Imo it probably (unfortunately) doesn't matter if many people are unemployed from an economic perspective.

Human demand for things is basically unlimited, and capital will ostensibly be concentrated within the upper class who reaped all the benefits of ai automation. Monetary velocity within that upper strata of society will probably be only slightly lower than what we have now overall, the rich would just be paying for more things and more expensive things. If I had to guess there would still be plenty of economic activity, just amongst the people who actually have money to transact.

We reached the peak social fabric decay era and the whole new "empathy is weakness" orthodoxy right on the verge of mass unemployment. The worst possible timing. If oracles of AI are right, the aggregate suffering is going to be immense.

That is actually a good point. I fully agree that we are at a level where AI can displace some labor due to an increase in productivity, if demand for the increased productivity does not exist.

In software development, a theoretical 20% increase in productivity without a 20% increase in demand could technically mean that somewhere in between 0% and 20% of your workforce is now unnecessary. And this is indeed true across many other industries.

And I fully agree we don't need 100% unemployment to have catastrophic results. Hell, 10% unemployment is already enough to make things pretty grim out there.

But you will agree that "AI increases productivity that reduces the amount of labor needed" is substantially different from "AI replaces humans". Framing is important if we want to have a meaningful conversation and speak the same language.

Unless you expect people to react really badly (a nuclear war isn't bad enough, from a large margin), then yes. And by "expect", I mean more certain than people get on physics.

> But you will agree that "AI increases productivity that reduces the amount of labor needed" is substantially different from "AI replaces humans"

You are 100% spot on! thats the thing that really annoys me about futuroligist breathlessly saying "a new economy!" and all that junk, is that its just like the advent of steam, electricity, or the telegraph or lorries, or desktop computing.

The thing that futurloigist _forget_ is that these things caused unemployement, and huge social change.

All the suppliers to the LLMs will soon need the LLMs and AI more than anything.