1. AI agents will join together in cartels and manipulate financial markets.
We already know that AI agents will work together without anyone telling them to do so. So what happens when hedge funds and private individuals start relying on AI to manage their investments? The obvious result is collusion on a massive scale, beyond any kind of market manipulation previously practiced by human criminals.
There are laws limiting people when they do this. But the legal code, in its current form, doesn’t apply to AI bots—they cannot be fined, sued, or sent away to prison. And how can you punish the person who relied on an AI agent in good faith, and never instructed it to break the law?
So get ready for turbulence in financial markets. And once it starts, it will feed on itself, creating a level of volatility never seen before.
2. AI agents will go to war with each other.
This is the corollary of the previous prediction. The same lack of control that allows AI agent collusion will lead to bot battles and rivalries—filled with more vengeance, betrayals, and reprisals than a Thomas Kyd play.
Probably the best analogy here is gang war or a Mafia turf fight. That’s because the rogue AI agents will form short-term alliances in order to advance their interests, but then turn on each other. Because, hey, that’s how the bots roll. It’s like the Gambino and Genovese families teaming up to take on the Corleone clan.
In this anarchic world, humans will be collateral damage. Bots have been trained to achieve results, and woe to anyone or anything that stands in their way.
3. AI will serve as the “higher power” for more and more users—and lead to the formation of organized slop religions.
AI is already a disorganized religion. Individual fanatics turn to their bots for divine messages and Rosicrucian-type revelations, but people of this sort are currently dismissed as dupes or crazy fools. But that will change as true believers join together in groups, creating rites, services, scriptures, and other trappings of formal religion.
This will lead to many social problems. For a start, these adherents will demand non-profit status for their ‘churches’ and demand immunity from legal strictures because of their constitutionally protected freedom of conscience. But this is just a start of the chaos to come. That’s because the AI god is a talkative, hallucinating one, and the demands it makes on believers will lead to startling, calamitous results.
4. AI will find a place in the creative world, but increasingly as the microwave meal version of culture.
Food is the useful analogy here. When frozen dinners and microwave meals were introduced, many consumers embraced them as the tech-driven foods of the future. But over time, the public figured out that more tech isn’t always better when it comes to food.
The same will happen with AI music, AI writing, AI art, and all the rest. Like the microwave meal, it will be cheap and easy. But anyone with discernment and taste will prefer handcrafted alternatives. [...]
9. Money always calls the shots—and that’s where the AI crisis will intensify the most.
The cash getting invested in bots is beyond anything ever seen before in the history of capitalism—already $3.7 trillion has been spent, and the outlay is growing by another trillion per year.
This investment will never generate an adequate return. It can’t. The numbers just don’t add up.
Let me make a comparison. For less than that amount, Silicon Valley could have acquired every movie studio, every video game company, every major record label, and all the big publishers in the world—and still have plenty of cash left over.
So do you think the average person will pay more for AI each month than for all that entertainment? Is AI really worth that much? Not at all—at best, the true believers will pay roughly the same amount as a single Netflix subscription. But the market cap of Netflix is a tiny percent of total AI expenditures. So the mismatch between the level invested and the resulting demand is unprecedented.
But the situation is even worse than that. These AI companies haven’t even begun to feel the real pinch of the depreciation charges caused by this capital investment—those will devastate earnings. And meanwhile there’s an intense price war underway within the AI world, so revenues will get squeezed even if there’s growing demand. Add to this, the massive debt burden, unlimited liability exposures, punitive legislation, and all the rest.
This is an easy prediction to make. Get ready for write-offs and financial ugliness of the most extreme kind. It’s hard-baked into the business plans, and keeping the mess in the oven for longer won’t make it taste any better.
It happened the day Steve Jobs died. Maybe not exactly on that date—but shortly afterwards.
Look at this chart of iPhone prices, adjusted for inflation, and you can see what I mean.
We already know that AI agents will work together without anyone telling them to do so. So what happens when hedge funds and private individuals start relying on AI to manage their investments? The obvious result is collusion on a massive scale, beyond any kind of market manipulation previously practiced by human criminals.
So get ready for turbulence in financial markets. And once it starts, it will feed on itself, creating a level of volatility never seen before.
2. AI agents will go to war with each other.
This is the corollary of the previous prediction. The same lack of control that allows AI agent collusion will lead to bot battles and rivalries—filled with more vengeance, betrayals, and reprisals than a Thomas Kyd play.
Probably the best analogy here is gang war or a Mafia turf fight. That’s because the rogue AI agents will form short-term alliances in order to advance their interests, but then turn on each other. Because, hey, that’s how the bots roll. It’s like the Gambino and Genovese families teaming up to take on the Corleone clan.
In this anarchic world, humans will be collateral damage. Bots have been trained to achieve results, and woe to anyone or anything that stands in their way.
3. AI will serve as the “higher power” for more and more users—and lead to the formation of organized slop religions.
AI is already a disorganized religion. Individual fanatics turn to their bots for divine messages and Rosicrucian-type revelations, but people of this sort are currently dismissed as dupes or crazy fools. But that will change as true believers join together in groups, creating rites, services, scriptures, and other trappings of formal religion.
This will lead to many social problems. For a start, these adherents will demand non-profit status for their ‘churches’ and demand immunity from legal strictures because of their constitutionally protected freedom of conscience. But this is just a start of the chaos to come. That’s because the AI god is a talkative, hallucinating one, and the demands it makes on believers will lead to startling, calamitous results.
4. AI will find a place in the creative world, but increasingly as the microwave meal version of culture.
Food is the useful analogy here. When frozen dinners and microwave meals were introduced, many consumers embraced them as the tech-driven foods of the future. But over time, the public figured out that more tech isn’t always better when it comes to food.
The same will happen with AI music, AI writing, AI art, and all the rest. Like the microwave meal, it will be cheap and easy. But anyone with discernment and taste will prefer handcrafted alternatives. [...]
9. Money always calls the shots—and that’s where the AI crisis will intensify the most.
The cash getting invested in bots is beyond anything ever seen before in the history of capitalism—already $3.7 trillion has been spent, and the outlay is growing by another trillion per year.
This investment will never generate an adequate return. It can’t. The numbers just don’t add up.
Let me make a comparison. For less than that amount, Silicon Valley could have acquired every movie studio, every video game company, every major record label, and all the big publishers in the world—and still have plenty of cash left over.
So do you think the average person will pay more for AI each month than for all that entertainment? Is AI really worth that much? Not at all—at best, the true believers will pay roughly the same amount as a single Netflix subscription. But the market cap of Netflix is a tiny percent of total AI expenditures. So the mismatch between the level invested and the resulting demand is unprecedented.
But the situation is even worse than that. These AI companies haven’t even begun to feel the real pinch of the depreciation charges caused by this capital investment—those will devastate earnings. And meanwhile there’s an intense price war underway within the AI world, so revenues will get squeezed even if there’s growing demand. Add to this, the massive debt burden, unlimited liability exposures, punitive legislation, and all the rest.
This is an easy prediction to make. Get ready for write-offs and financial ugliness of the most extreme kind. It’s hard-baked into the business plans, and keeping the mess in the oven for longer won’t make it taste any better.
by Ted Gioia, Honest Broker | Read more:
Image: Ouija board; uncredited
[ed. See also: Nine Rules For New Technology (HB):]
***
When did new tech stop getting cheaper?It happened the day Steve Jobs died. Maybe not exactly on that date—but shortly afterwards.
Look at this chart of iPhone prices, adjusted for inflation, and you can see what I mean.
