AI isn’t Changing Anything

Whether one is a fan or a foe of AI, almost everyone believes in its incredible world changing power. What I’m about to tell you might be a shock, but AI will not fundamentally change the way the world works. While it does have some unique capabilities, it is far from the panacea that most people believe it will be. Its greatest capabilities in a professional setting have been repetitive task completion and information summarization. While both of these things are very helpful to most businesses, they are not the crucial parts of business needed to unlock extreme value. Even as it has only modest capabilities in most settings, the majority of workers are using artificial intelligence on a low enough level that they are not even able to access these benefits. Finally, the subsidization of tokens means that all efficiency gained by AI will be dramatically cut into in just a few years or months. AI has capability, but it takes more than capability to change the world.

Artificial intelligence is not at a level where it can do everything. AI cannot run an organization from the top or understand ambiguity and difficult trade-offs well enough to make decisions in real time. Even when given a simple task, most publicly available artificial intelligence needs significant handholding. While its accomplishments might feel impressive to someone from a pre-technology era, it often takes just as long to prompt the AI to do it correctly as it would to do it oneself. While there are some models that are perfectly suited to certain tasks, they’re usually far more expensive than even standard industrially used artificial intelligence. Any company will recognize that there should be limits to employee AI usage, as the number of tokens a single employee can consume can become exceedingly expensive very quickly. Although this protects the company, it makes a moderately useful tool slightly less useful. AI will most likely reach a point where it can navigate messy inputs and outputs, but in its current state AI adds the most value to the same sort of products that would have already been easy for humans.

Even with tasks that AI is well suited for, the generation of people in power at most businesses is far from being able to utilize AI to reap the potential consequential benefits. Large institutions will spend billions of dollars on artificial intelligence, yet the employees who make the most decisions use it as nothing more than a glorified search engine. Whether or not people effectively use it, their companies are still paying through the nose for access to the systems. When a large majority of the company’s employees are using an expensive technology for its most low-value uses, it is unlikely that that technology will be appreciated by management. Even training is often unable to overcome the gap in effective utilization between younger and older generations. Artificial intelligence can be a helpful tool when used correctly, but the nuances of using it correctly are far more difficult than most AI productivity gurus will admit. Business value comes from rigorous human thought applied to experience, and artificial intelligence often only inhibits that process. If the thinking can be done without artificial intelligence and AI execution can be integrated; then real value can be unlocked, but that is a rare sequence of events.

Finally, almost no one recognizes how heavily subsidized artificial intelligence consumption is. Tokens are far cheaper than they would be if artificial intelligence was not in such an experimental stage as an industry. OpenAI and Anthropic are maximizing learning because they know the profits will come later. They are racing to create a generationally defining technology, making almost any cost acceptable if it leads to industry domination. However, the cost of computing power and the growing demand for it will only lead to higher prices in the future, unless some drastically more effective alternative to data centers is discovered. While models are becoming exponentially more effective, they must continue improving faster than demand and compute costs increase. Otherwise, tokens will not be available at today’s prices without substantial subsidization. Unless we are certain that the industry is competitive and free, we may have to worry about rapidly increasing prices at the center of our business world.

Although many people will continue to wax poetic about the potential dangers or unlimited utopian benefits of artificial intelligence, you can feel free to disagree. There are many reasons to believe that AI will not take countless jobs, while at the same time, not bringing in a new era of human flourishing. It can make some tasks easier and may change a lot about the way we work, but wise human choices and organizational efficiency will ultimately determine whether it’s just another technological tool or a powerful world changer.