Promises of AI are fueling today’s bull market, according to CNN Business, despite the worrying impacts of recession and inflation worries, war in Ukraine, and the inherent instability of the upcoming Presidential election.
The journalist notes that investors hope that a handful of big tech companies “…can drive a new tech revolution with artificial intelligence.”
Somebody call the euphemism police.
The AI promise is quite broad and ill-defined, but its most notable signposts are that it will:
- Put many millions of people out of a job by replacing them with machines
- Make companies and individuals better at extracting actions (and money) from each other, both legally and otherwise, and
- Potentially train an errant intelligence that decides to destroy humankind.
Such effects are considered cost externalities because the impacts are too large and/or too far-off to assess with the reliability of, say, estimating next quarter’s revenue and earnings (which many companies get wrong all the time).
They’re simply ignored and left out of the calculations.
This fact of market pricing is what continues to give us soaring oil company valuations despite the air pollution their products create. Generations of business practices that were biased and exclusionary had impacts for which there’s still been no fair or meaningful accounting.
Monetizing just about anything usually comes with costs to the environment, society and cultures, and individuals’ lives that aren’t included in how markets perceive value.
Just consider what we’re all paying for making social media companies rich. It’s almost as if we were being taxed for the privilege of chatting with each other, only those taxes come in complicated packages that we can’t price (let alone solve), like increased teen depression and suicides, and the collapse of civil society.
Since its really tough to assign exact figures to those impacts, they’re left out of the value equations.
This reality does not bode well for our understanding of this new tech revolution.
What will it truly cost us to realize all of it’s promised benefits? Again, you may have to lose your job and who knows what work you’ll find instead. It will use lots of energy that will need to come from somewhere. Soldier robots and smart ammunition will make waging wars more efficient and possibly more likely.
Automation of much of our daily lives will change our perceptions of others and ourselves in ways that will make social media’s impacts look irrelevant by comparison.
Oh, and then an AI might decide to obliterate all inferior life forms on the planet.
Cost externalities is a euphemism, too. What they’re really saying is that those things will impact other people, not you, so don’t worry about it.
What’s a few million people put out of work or climate change made worse in exchange for an uptick in your monthly retirement account statement?
So, enjoy whatever you can get from today’s new tech revolution bull market.
It’s all but certain that you’ll end up paying for it tomorrow.