Comment by nostrademons
3 days ago
I've noticed this as well. It's a huge boon for startups, because it means that a lot of functions that you would previously need to hire specialists for (logo design! graphic design! programming! copywriting!) can now be brought in-house, where the founder just does a "good enough" job using AI. And for those that can't (legal, for example, or various SaaS vendors) the AI usually has a good idea of what services you'd want to engage.
Ironically though, having lots of people found startups is not good for startup founders, because it means more competition and a much harder time getting noticed. So its unclear that prosumers and startup founders will be the eventual beneficiary here either.
It would be ironic if AI actually ended up destroying economic activity because tasks that were frequently large-dollar-value transactions now become a consumer asking their $20/month AI to do it for them.
> ironic if AI actually ended up destroying economic activity
that's not destroying economic activity - it's removing a less efficient activity and replace it with a more efficient version. This produces economic surplus.
Imagine saying this for someone digging a hole, that if they use a mechanical digger instead of a hand shovel, they'd destroy economic activity since it now cost less to dig that hole!
It's not that it's replacing one form of activity with a cheaper one, it's that it removes the transaction. Which means that now there's nothing to tax, and nothing to measure. As far as GDP is concerned, economic activity will have gone down, even though the same work is being accomplished differently.
This sounds in awful lot like a cousin of the broken window fallacy.
The fallacy being that when a careless kid breaks a window of a store, that we should celebrate because the glazier now has been paid to come out and do a job. Economic activity has increased by one measure! Should we go around breaking windows? Of course not.
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As others have pointed out, this is a fallacy. By reducing costs in the supply chain, higher volumes of outputs are enabled. Nobody digs holes for for the sake of digging holes; by reducing costs and transaction volume at this layer, more businesses can afford to open and more money can be spent at higher value layers.
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If more value is being created more efficiently, in the end it’s just a question of coming up with taxation system designed for the new economy.
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If AI concentrates economic activity and leads to more natural monopolies (extremely likely), yeah, the lower level activity becomes more efficient but the macro economy becomes less efficient due to lower competition.
Software has basically done the same thing, where we do things faster and the fastest thing that happens is accumulation of power and a lower overall quality of life for everyone due to that.
How does enabling every person on earth to create Hollywood-quality films (for better or worse) result in more natural monopolies?
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Yeah, indeed. People on this website tend to look at the immediate effects only, but what about the second order, macro effects? It's even more glaring because we've seen this play out already with social media and other tech "innovations" over the past two decades.
I mean, since we're in tech here we like pointing out that software has done this....
But transportation technology has done this readily since the since ICE engines became wide spread. Pretty much all cities and towns and to make their 'own things' since the speed of transpiration was slow (sailing ships, horses, walking) and the cost of transportation was high. Then trains came along and things got a bit faster and more regular. Then trucks came along and things got a bit faster and more regular. Then paved roads just about everywhere you needed came along and things got faster and more regular. Now you could ship something across the country and it wouldn't cost a bankrupting amount of money.
The end result of technology does point that you could have one factory somewhere with all the materials it needs and it could make anything and ship it anywhere. This is why a bit of science fiction talks about things like UBI and post-scarcity (at least post scarcity of basic needs). After some amount of technical progress the current method of work just starts breaking down because human labor becomes much less needed.
You are right. The next question is, who gets the surplus?
the owner of the AI software and hardware, then the user of said AI (who captures the remaining surplus that the AI owner doesn't/can't capture).
your example is complete nonsense as digging a hole is not creative in any way at all
People get paid to create holes for useful purposes all day everyday. It is creative in a very literal sense. Precision hole digging is - no joke - a multibillion dollar industry.
Unless you are out in nature you are almost certainly sitting or standing on top of a dirt that was paid to be dug.
If you mean hole digging isn’t creative in the figurative sense. Also wrong. People will pay thousands of dollars to travel and see holes dug in the ground. The Nazca lines is but one example of holes dug in the ground creatively that people regard as art.
My 8 & 6 year old have spent 2 weeks digging a hole out in our little forest. It has been one of the most bonding & therapeutic things in them I’ve witnessed. They’ve developed stories, they go out and dig after school or when they are upset, etc.
Give a boy a shovel, step back & witness unbridled creativity.
How many holes have you dug?
What was the soil like?
What was the weather like?
What equipment did you use?
Do you dig during daylight only?
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It creates a hole. What does AI create?
Incumbents hate this one trick!
Until everyone has a personal fully automatic hole digger and there are holes being dug everywhere and nobody can tell any more where is the right and wrong place to dig holes
It doesn't cost less to get the thing you actually want in the end anyway, no one in their right mind would actually launch with the founder's AI-produced assets because they'd be laughed out of the market immediately. They're placeholders at best, so you're still going to need to get a professional to do them eventually.
You say this but I see ai generated ads, graphics, etc. daily nowadays and it doesn't seem like it affects at all people going or not going to buy what these people are proposing.
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Prototypes being launched as products is so common it’s an industry cliche.
Having those prototypes be AI generated is just a new twist.
We see plenty of AI produced output being the final product and not just a placeholder.
> I've noticed this as well. It's a huge boon for startups, because it means that a lot of functions that you would previously need to hire specialists for (logo design! graphic design! programming! copywriting!) can now be brought in-house, where the founder just does a "good enough" job using AI.
You are missing the other side of the story. All those customers, those AI boosted startups want to attract also have access to AI and so, rather than engage the services of those startups, they will find that AI does a good enough job. So those startups lost most of their customers, incoming layoffs :)
Then there's the 3rd leg of the triangle. If a startup built with AI does end up going past the rest of the pack, they will have no technical moat since the AI provider or someone else can just use the same AI to build it.
How frequently is a technical moat the thing that makes a business successful, relative to other moats?
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But if startups have less specialist needs they have less overall startup costs and so the amount of seed money needed goes down. This lowers the barrier for entry for a lot of people but also increases the number of options for seed capital. Of course it likely will increase competition but that could make the market more efficient.