David Friedberg: AI Will Produce More Than Humans Can Consume — And That Changes Everything

I think fundamentally if you're driving productivity with AI, you're driving leverage on human time and leverage on capital. The question is how quickly can you drive that up? And that's a function of how much consumption there is, how much capacity there is for consumption. So if your earnings are the same, but things are getting more expensive, you're not happy. If your earnings go up by 10%, things stay the same price, you got 10% more than you had last year, you're you're going to be happy. I just think like all humans are driven by this need to consume more each year than they did last year. So I think for me that's

like the lower limit on consumptive capacity in the world. The question that we're now facing which we've never faced in human history before is there a upper limit >> on consumptive capacity because AI creates such a profound shift in productivity and in leverage that normally you would say hey when we get a new tool or we get new leverage in a system we build a new technology we can make more with less. Therefore, everyone gets access to more things for the same price or the cost of things that they consume come down by a certain price. But there may be a situation now where the ability to make stuff exceeds the capacity to consume stuff. And that is

something that I don't think we've faced before. And I think that's sort of where a lot of the models start to break. Just general economic models, just general productivity models, and general social models. And this goes to the point about like what is everyone going to do? In the same way that I think we've argued that maybe SAS was a transitory business phenomenon that existed between the foundation of the internet and the era of AI. It may be the case that knowledge work in general is also a transitory phenomenon that only existed between the foundation of the computer or computing tools and the existence of AI generally speaking. And if all of that goes away

very quickly and all of those people can be redistributed and recast into doing other higher level more creative things, their productivity goes up by 100x. Is there really a consumer on the other end of all of that productivity? Is there really enough consumptive capacity? And I think that's the profound question that we all