You might have read how AI is the end of society. Perhaps Alap Shah’s “2028 global intelligence crisis” fearing a 38% S&P crash and a white-collar displacement spiral. Or Matt Shumer and the end of coding. Or Leopold Aschenbrenner “Situational Awareness” trillion-dollar compute clusters. TechCrunch: “the gradual unspooling of the economy itself.”
But notice every single one of them is on the capital side of the table. They see what happens to the world (which they fund). But what about the rest of us? — the builders, the consumers, the nature lovers, the patients, … IMO news of society’s death is greatly exaggerated.
The right question is where does value go when intelligence is abundant? AI will erode effort, friction to do, to coordinate, ….
Current investors don’t care every restaurant will be able to replicate DoorDash. Those restaurants will be overjoyed not to pay 30% to some company in Silicon Valley. AI tools make coders do more, thinkers think better, consumers get more options, patients will get more information. No more moats on interfaces, or habits, or capital, … always get exactly what you need with least effort.
Today we see electronic chips cost explode 500% as AI companies hoard them. What do you think will happen next few weeks? We’ll see more open models that use less RAM or old chips. AI will always eat friction wherever it finds it, innovation always has, now it’s just faster. Profit margins will decrease, supply chains will get shorter, capex and OPEX costs will go down, value generated will increase. It is the “Abundant Intelligence Economy.”
It will do so until it meets the 3 boundaries: Physics (You can’t cheat physics… heat, weight, energy, …). Nature (You can’t lie to nature for long, but we keep trying). Morals (AI will always need a directive, someone’s morals, taste, accountability).
The transition can be painful. Citrini Research, and others, are right about that. But the pain doesn’t sort by class — it sorts by adaptability. A fund manager clinging to SaaS multiples gets hit just as hard as a coder who refuses to use AI. Unlike other technologies, most of us will have unprecedented access to the innovations that force the opportunity/need to adapt.
And here’s what should excite investors, not terrify them: the optimal strategy is exactly what good allocators already do — follow scarcity. The only thing that is changing is what’s scarce. Today it is information asymmetry, tall moats, capital access, coordination. And slowly but surely it will end up in physics, nature, and moral judgment. Find the path, rebalance to whatever irreducible friction of the moment and you’ll even increase returns as others fail.
The Abundant Intelligence Economy isn’t a crisis. It’s the most exciting reallocation of capital and talent in a generation — if you’re reading the right map.
I’m drafting a longer version of this. If you’re thinking about the same questions, I’d love to hear your thoughts.
Originally posted on LinkedIn.