There is a very successful Austrian musical called “Elisabeth” which tells the tale of the Austrian empress of the same name and her demise. There is a scene where the anarchist Luigi Lucheni (who will later be her murderer) rallies the people against Elisabeth by convincing them that the shortage of milk they are experiencing is caused by their empress using all the milk for bathing. While none of this is likely to be historically accurate, it shows an interesting pattern. Namely, that such an allocation of resources may be perceived as deeply unjust while being completely economically viable.
Unfortunately, there are also non-fictional examples of this effect at play. The most prominent of which is probably “food versus fuel”. During the 2000s, ethanol production from corn spiked. This created a situation where industries that use corn for food production suddenly had to compete with an industry with a lot more purchasing power caused by fuel prices, subsidies and legal blending requirements driving demand. Economists think that this significantly contributed to rising food prices.
Maybe you’re not fully seeing the parallel there because the former example is very emotional while the latter is lame in comparison. But the story is the same: a resource with a limited supply is suddenly used in new ways that require a lot of it to appease a customer base that is much wealthier than the previous one. If you want another example, think of Quinoa and how western countries suddenly developed an interest in the grain which caused brief price spikes in producing countries, leading to some locals not being able to afford it anymore. This more blatantly tells the same narrative as the Elisabeth example: the rich can take what they want.
Now, you might be wondering why I write about this topic now. To which I’d answer: have you tried to build a gaming PC recently? If you have, you’ll know what I’m talking about: memory prices are through the roof. Semiconductor manufacturers are orienting almost their whole production capacity towards AI data center hardware. It’s the same story. Rich tech companies are willing to pay almost any price for fear of losing the “AI race” while the gaming industry is in crisis. To be clear, it’s not just the gaming industry, it’s all of consumer electronics, but gaming is where the effects are most apparent. Everyone will still need a phone. If they need a PC for work, they’ll still buy a PC. But they might think twice about buying a games console.
But is “Consumer electronics versus AI compute” really the same thing as “food versus fuel”? There is one big difference: while everyone needs food, everyone also needs fuel (at least indirectly as we all rely on logistics networks). And while it’s nearly impossible these days to live your life without any electronics, do we really all need AI? Sure, everyone’s talking to chatbots these days, but that’s not what this is about. That’s just the tiny fraction of the market these companies actually earn as revenue. The bulk of it, and that is the totally unprecedented part, is investments. Investments into the “AI race”. Which is a race towards … what exactly?
An answer you might get from the tech bros is “Artificial General Intelligence”. But while I won’t claim that this prospect is impossible, it probably isn’t, I’m deeply convinced that these investments are not how we are going to achieve it. I’m certain that there is at least one puzzle piece missing to create fully autonomous AI agents and nobody knows when we will discover that missing piece. Investing heavily in compute now does not help with that.
But maybe it’s not about AGI after all. Coding agents have disrupted the software industry in a major way, that I can tell from personal experience. At the moment, nearly everyone is either using agents, integrating agents, optimizing their code base for agents or all of the above. This is the new paradigm for how software will work from now on. So if you can control the agents, you can control all software. Is that what the AI race is all about? Controlling all software? Can you imagine that immense power? If any company had a monopoly on software, one could reasonably call that world dominance.
You might be thinking: “We wouldn’t have to bow down to such a company, we could just write software the old fashioned way” - but think again. You’re used to writing software in an ecosystem that is largely dominated by humans, operating on human time scales. But how would you be able to compete in a world where AI powered development keeps developing the protocols, the operating systems, the compilers and the standard libraries you rely on. Do you honestly think you’d be able to keep up? It doesn’t even stop there, AI might also be used to develop next generation silicon, electronics and any physical infrastructure. You might be able to form a small resistance group, working on your own networks with 2020s hardware and software, held together by solder and duct tape. But you won’t be able to compete against a rapidly evolving, world-scale machine that has simply raced away.
This is not your regular AI doomsday scenario. May I remind you, it doesn’t involve AGI at all. It’s all just LLMs used by a few skilled architects and funded by even fewer ultra rich individuals. The threat is not AI getting out of control, it’s rich people getting out of control. They are not investing in AI data centers right now because they think it will benefit all of us. They think that whoever will win the AI race will be able to dominate the world and I think they might be right about that.
So once they have dominated the software market, cornered the hardware market and can basically prompt any physical product into existence, they can cut their dependence on any physical labor. They don’t need AGI controlled humanoid robots for that, they can just have a machine custom built for every task that still depends on human labor. What isn’t economically feasible now due to copious R&D costs will just be a few prompts and terawatt hours of compute away for them. And once they don’t need any of us anymore, what will they do?
Well, let’s hope they don’t find a past time that requires enormous amounts of oxygen.
