Tech Tycoons have Got the Economics of AI Wrong

Even as economic development was simply taking off, some financial experts were already downhearted. Coal, composed William Stanley Jevons in 1865, is « the mainspring of modern-day product civilisation ». Yet it was limited and would quickly go out. Although more could be found by digging deeper, it would be significantly expensive to extract and these higher costs would minimize the competitiveness of Britain’s producers. After all, in other nations the black fuel was still in sight of daylight. Efficiency gains-using less coal to produce the exact same amount of stuff-would not save the nation. Indeed, cleverer use of restricted resources would simply offer an incentive to burn even more coal, which would, paradoxically, lead to an even quicker use of British reserves. There was no escape, the Victorian financial expert thought. Coal would be tired and the nation was likely to « contract to her previous littleness ».

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This post appeared in the Finance & economics section of the print edition under the headline « Rocked by DeepSeek »

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Tech tycoons have got the economics of AI incorrect

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