Will AI usher in an era of explosive economic growth?

The ease with which he can use AI is the same as for everyone else. Therefore he gains no relative benefit and can't "make money from AI".

However, information-retrieval and "thinking assistance" helps everyone at the same time. Asking for summarization and clarification of any (legal or technical) document, finding the right references, and so on. It's like everyone gets instant access to a research department.

This means fewer people are needed for "clerical jobs". Effectively, it diminishes the economic value of memorisation and mechanical information work. But that's probably good a thing.

Economic activity benefits the people who, in the end, consume the products and services. Today, there are long and intransparent supply chains but I think they mostly serve this goal. Economic growth, however does not only require better products and services in the pipeline. It also needs consumers who are ready to adopt these innovative products. A significant part of the world has aging populations (China, Japan, western Europe). There, a large fraction of the population might not adopt new and innovative life styles.

I think this is the reason why every innovation takes time until it's faded in completely and the entire society benefits from the innovation. So, neither AI nor other innovations will usher in an era of explosive growth.

I think it will further enable corporate growth. Current "AI" is essentially corporate lubrication. In condensing 30 years of internet content into vectors, it enables the creation and maintenance of systems close to the mean. It will make it very easy for boards to get rid of middlemen and run skeleton crews. The fine tuning left to do is all about variance and liability. It won't enable new things, it will enable more and cheaper common things.

Yes. I believe so. Maybe it won't happen this year. Maybe not next year. But in 3 years, I think the world will radically change.

Here's an example use case we found for our business:

Our sales people request invoices from a potential customer. On those invoices are our competitor's services and price. We have matching services and our own prices. The goal is to find similar services where we charge less. In the past, our sales people would spend hours combing through those invoices. We wrote a prompt for GPT4, fed in our services and prices, and asked it to find services we could potentially replace as well as our profit margin. It took us a day to write this prompt. The results were outstanding and GPT4 gave accurate results. We even asked it to package it up in a PDF for us.

This will save our company hundreds of thousands each year and we can get back to the potential customer much faster than before - increasing the likelihood of a sale.

If we had to program this like normal software, it'd probably take months to get it right. Chances are, engineering would never even prioritize this feature for our sales people.

GPT6 with much higher context and much cheaper inference cost? Yes please. I think people can't imagine how it's going to change everything.

Totally agree. What is hard to see right now in business is talked about by Charlie Munger in Poor Charlie's Almanac.

What you describe will save your company money because you are an early adopter but in the long run, everyone is going to do these kind of things and the savings will be passed on to the consumer.

Munger mentions this talking about a textile business they had. The new more efficient machine wasn't going to make the business better but just end up passing savings on to the consumer so they actually sold the business.

Management wouldn't have prioritized that project for engineering because it would have cost too much and have uncertain benefits given the cost.

This is all massively deflationary and certain highly prized skills that cost $120k a year per right now, will be $20 bucks a month in 2024 dollars someday.