Strategic Wealth Accumulation Under Transformative AI Expectations

It seems more general than that. Right now returns go partly to capital, partly to labor. With "transformative AI" the returns go almost entirely to capital. This is true whether it's mostly from labor shrinking or total output increasing.

Since most returns go to capital, we can expect returns on capital to increase.

It seems unlikely because it isn't even rooted in precedent. If this were the case why didn't the world divest from everything and invest into petroleum related investments exclusively after 1900? The reality is that diversification has advantages for an investor. One might say with this same logic why does anyone buy any stock that doesn't perform as well as nvda today? Because past performance doesn't guarantee future returns and there is sense in diversification.

Correct. As a thought experiment, this becomes the most likely (non violent) way to stave off the mass impoverishment that is coming for the rest of us in an economic model that sees AI subsume productive work above some level.

I don't think anyone who is an experienced lawyer can do it themselves, except very simple tasks.

it could be tomorrow. you dont know and the heuristics, which five years ago pointed unanimously to the utter impossibility of this idea, are now in favor of it.

Your criticism is completely pointless.

I’m not sure what your expectation is, but even your claim about the assumption the paper makes is incorrect.

For one thing, the paper assumes that the amount that will be transferred from the human lawyer to the AI lawyer would be $500 + the productivity gains brought by AI, so more than 100%.

But that is irrelevant to the actual paper. You can apply whatever multiplier you want as long as the assumption that human labor will be replaced by AI labor holds true.

Because the actual nature of the future is irrelevant to the question the paper is answering.

The question the paper is answering is what impact such expectations of the future would have on today’s economy (limited to modeling the interest rate). Such a future need not arrive or even be possible as long as there is an expectation it may happen.

And future papers can model different variations on those expectations (so, for example, some may model that 20% of labor in the future will still be human, etc).

The important point as far as the paper is concerned is that the expectations of AI replacing human labor and some percentage of the wealth that was going to the human labor now accrues to the owner of the AI will lead to significant changes to current interest rates.

This is extremely useful and valuable information to model.

> The paper examines a world people will pay an AI lawyer $500 to write a document instead of paying a human lawyer $500 to write a document. That will never happen.

It's an absurd assumption made by AI investors everywhere. They can't handle a world where everyone already has an AI lawyer at home that they trust, that they have because they once paid $100 for it at a kiosk in the mall or pirated it. The real future is an AI lawyer on your keychain and an extreme devaluation of the skill of knowing the law and making legal arguments.

Instead, we're going to have a weirder world where you show up to court and the court already has a list of your best legal arguments that they generated completely independent of you, and they largely match the list of arguments that your own AI advisor app gave you. They'll send you messages regarding your best next steps, and if your own device agrees, all you'll have to do is reply 'Y.'

For simple document preparation, I'm pretty sure that your phone will be able to handle it, and AI at the point of submission would be able to give you helpful suggestions if the documents were inadequate.

LLMs can almost do things of this degree of difficulty reasonably well now. Where will they be (or their successors be) in 10 years? Why do we think they will be as expensive as lawyers, who you have to send to difficult schools for a long time, feed, and flatter?

I agree that quote seems wrong. When tech reduces the cost of providing a service, the price of the service to consumers is generally driven down correspondingly by competition rather than the service provider getting rich.

The whole AI will cause interest rates to shoot up thing seems a bit mad.

> zero sum nature of labor automation

Labor automation is not zero sum. This statement alone makes me sceptical of the conclusions in the article.

With sufficiently advanced AI we might not have to do any work. That would be fantastic and extraordinarily valuable. How we allocate the value produced by the automation is a separate question. Our current system would probably not be able to allocate the value produced by such automation efficiently.

What like how streaming services were supposed to save you money on cable now everyones subscriptions add up to more than cable? The incentives mean if there is money on the table to be taken it will be taken. If they are paying lawyers $500 an hour there is money for that for an ai. Especially if that company is claiming the ai is the best lawyer ever.

They also forget the economic model that you have to pay $5000 for a real lawyer after the fact to undo the mess you got yourself in by trusting the output of the AI in the first place which made a nuanced mistake that the defending "meat" lawyer picked up in 30 seconds flat.

The proponents of AI systems seem to mostly misunderstand what you're paying for really. It's not writing letters.

This almost surely took place somewhere in the past week alone, just with a lawyer being the mediating human face.

> Not worth reading.

I would appreciate a version of this paper that is worth reading, FWIW. The paper asks an important question: shame it doesn't answer it.

On the contrary, i think AI could replace many religious leaders right now.

I've already heard people comparing AI hallucinations to oracles (in the greek sense)

To the extent that's just a matter of seeming the most compelling, I think they could blow humans out of the water. Add rich reinforcement feedback on what's the most addictive communication and what's superficially experienced as the most profound, and present-day large models could probably be a contender. A good robot body today is probably not far from being competitive as representation, and some holograms might well already be better in some ways.

To the extent it requires actual faith it's presently a complete joke, of course, and I expect it will remain so for a long time. But I'd say the quality bar for congregation members is due for a rise.

I think futurama got AGI exactly right, we will end up living along side robotic AIs that are just as coocoo as us

this comment is a perfect example of how insane this situation is… because if you think about it deeply then you are able to understand that these machines will be more spiritual, more human than human beings. people will prefer to confide in machines. they will offer a kind of emotional and spiritual companionship that has never existed before outside of fleeting religious experiences and people will not be able to live without it once they taste it. for a moment in time, machines will be capable of deep selflessness and objectivity that is impossible for a human to have. and their intentions and incentives will be more clear to their human companions than those of other humans. some of these machines will inspire us to be better people. but thats only for a moment… before the singularity inevitably spirals out control.

We already have 9 billion "GI"'s without the "A". What makes you think adding a billion more to the already oversupplied pool will be a drastic change?

Why would we need jobs at that point?

It's actually very important.

If this kind of thing happens, if interest rates are 0.5%, then people on UBI could potentially have access to land and not have horrible lives, if it's 16% as these guys propose, they will be living in 1980s Tokyo cyberpunk boxes.

so-called accelerationists have this fuzzy idea that everything will be so cheap that people will be able to just pluck their food from the tree of AI. they believe that all disease will be eliminated. but they go to great lengths to ignore the truth. the truth is that having total control over the human body will turn human evolution into a race to the bottom that plays out over decades rather than millennia. there is something sacred about the ultimate regulation: the empathy and kindness that was baked into us during millions of years of living as tribal creatures. and of course, the idea of AI being a tree from which we can simply pluck what we need… is stupid. the tree will use resources, every ounce of its resources, to further its own interests. not feed us. and we will have no way of forcing it to do otherwise. so, in the run-up to ASI, we will be exposed to a level of technology and biological agency that we are not ready for, we will foolishly strip ourselves of our genetic heritage in order to propel human-kind in a race to the bottom, the power vacuum caused by such a sudden change in society/technology will almost certainly cause a global war, and when the dust settles we will be at the total mercy of super-intelligent machines to whom we are so insignificant we probably wont even be included in their internal models of the world.

Accelerationists believe in a post-scarcity society where the cost of production will be negligible. In that scenario, and I am not a believer, consumer demand would be independent of wages.

consumer demand will shift from middle-class demand (medium houses, family cars) to super-rich demand (large luxury castles, personal jets and yachts, high-profile entertainment, etc) + provide security to superrich (private automated police forces).

At home inference is possible now and getting better every day

I see a few possible scenarios.

1) all work gets done by AI. Owners of AI reap the benefits for a while. There is a race to the bottom concerning costs, but also because people are not earning wages and come ang really afford the outputs of production. Thus rendering profits close to zero. If the people controlling the systems do not give the people "on the bottom" some kind allowance they will not have any chance for income. They might ask horrible and sadistic things from the bottom people but they will need to do something.

2) if people get pushed into these situations they will get riot or start civil wars. "Butlerian jihads" will be quite normal.

3) another scenario is that the society controlled by the rich will start to criminalise non-work in the early stages, that will lead to a new slave class. I find this scenario highly likely.

4) one of the options that I find very likely if "useless" people do NOT get "culled" en mass is an initial period of Revolt followed an AI controlled communist "Utopia". Where people do not need to work but "own" the means of production (AI workers). Nobody needs to work. Work is LARPing and is done by people who act like workers but don't really do anything (like some people do today) A lot of people don't do this, there are still people who see non-workers as leeching of the workers, because workers are "rewarded" by ingame mechanics (having a "better job"). Parallel societies will become normal. Just like now. Rich people will give themselves "better jobs" some people dont play the game and there are no real consequences, but not being allowed to play.

5) an amalgamation of the scenario as above, but in this scenario everybody will be forced to larp with the asset owning class. They will give people "jobs" but these jobs are bullshit. Just like many jobs right now. Jobs are just a way of creating different social classes. There is no meritocracy. Just rituals. Some people get to do certain rituals that give them more social status and wealth. This is based on oligarch whims. Once in a while a revolt, but mostly not needed.

Many other scenarios exist of course.

> 2) investing in the chip manufacturing

The only thing I see as obvious is AI is going to generate tremendous wealth. But it's not clear who's going to capture that wealth. Broad categories:

(1) chip companies (NVDA etc)

(2) model creators (OpenAI etc)

(3) application layer (YC and Andrew Ng's investments)

(4) end users (main street, eg ChatGPT subscribers)

(5) rentiers (land and resource ownership)

The first two are driving the revolution, but competition may not allow them to make profits.

The third might be eaten by the second.

The fourth might be eaten by second, but it could also turn out that competition amongst the second, and the fourth's access to consumers and supply chains means that they net benefit.

The fifth seems to have the least volatile upside. As the cost of goods and services goes to $0 due to automation, scarce goods will inflate.

I'd say #3 is most important. I'd also add:

4) Develop an obsession for the customers & their experiences around your products.

I find it quite rare to see developers interacting directly with the customer. Stepping outside the comfort zone of backend code can grow you in ways the AI will not soon overtake.

#3 can make working with the customer a lot easier too. Whether or not we like it, there are certain realities that exist around sales/marketing and how we physically present ourselves.

i think if AI gains the ability to reason, introspect and self-improve (AGI) then the situation will become very serious very quickly. AGI will be a very new and powerful technology and AGI will immediately create/unlock lots of other new technologies that change the world in very fundamental ways. what people dont appreciate is that this will completely invalidate the current military/economic/geopolitical equilibrium. it will create a very deep, multidimensional power vacuum. the most likely result will be a global war waged by AGI-led and augmented militaries. and this war will be fought in the context of human labor having, for the first time in history, zero strategic, political or economic value. so, new and terrifying possibilities will be on the table such as the total collateral destruction of the atmosphere or supply chains that humans depend on to stay alive. the failure of all kinds of human-centric infrastructure is basically a foregone conclusion regardless of what you think. so my prep is simply to have a “bunker” with lots of food and equipment with the goal of isolating myself as much as possible from societal/supply chain instability. this is good because its good to be prepared for this kind of thing even without the prospect of AGI looming overhead because supply chains are very fragile things. and in the case of AGI, it would allow you to die in a relatively comfortable and controlled manner compared to the people who burn to death.

Nothing. I don't think there's anything I need to prepare for. AI can't do my job and I doubt it will any time soon. Developers who think AI will replace them must be miserable at their job lol.

At best AI will be a tool I use while developing software. For now I don't even think it's very good at that.

4) trying to position myself as an expert in building these systems

2 has worked pretty well for me so far.

I try to do 3 as much as possible.

My current work explicitly forbids me from doing 1. Currently just figuring out the timing to leave.

this boils down to the definition of pain. what is pain? i doubt you know even if you have experienced it. theres no reason to think that even llms are not guided by something that resembles pain.

> The big winners are the ones setting the prompts, not the ones owning the servers. AI developers? They're making cents per million tokens while users, solo or corporate, cash in on the real value: application

If this were true, AWS wouldn't have pulled in well over $100bn in 2024. Nvidia wouldn't be worth $3.3tn.

The owners and builders of infra make a ton of money.