What if AI is Only a Cost and Not a Profit Bonanza?

May 16, 2023

by Charles Hugh Smith Of Two Minds

In the real-world, the costs are all we know for sure and profits remain elusive and contingent.

No one knows how the flood of AI products will play out, but we do know it’s unleashed a corporate frenzy to “get our own AI up and running.” Corporate fads are one of the least discussed but most obvious dynamics in the economy. Corporations follow fads as avidly as any other heedless consumer, rushing headlong into whatever everyone else is doing.

Globalization is a recent example. Back in the early 2000s, I sat next to corporate employees on flights to China and other Asian destinations who described the travails and costly disasters created by their employers’ mad rush to move production overseas: quality control cratered, proprietary technologies were stolen and quickly copied, costs soared rather than declined, and so on.