Friday, May 1, 2026

Intelligence as a Commodity

     In some sense, current AI is commoditized. A $20 subscription of one model is somewhat equivalent to the next best-in-class. An open source models (often distilled from leading models) catch up to the frontier within a year. But the value of superior intelligence in the future will be more akin to extremely intense workloads done infrequently, more akin to high-touch consulting or investment banking than software consultancy. Running a comparable model a thousand times as much as a competitor will create a market advantage, as will running a model 10% smarter even if it's twice as expensive. The idea that everyone will have access to the same intelligence is laughable, unless you believe intelligence is immune from the benefits of quality and quantity.

    Exploring every aspect of a problem is valuable. Understanding the patterns that emerge from this analysis slightly faster (or at a higher level) is valuable. A system that learns continually doesn't stop growing in value, even if it grows in price.

AI Everywhere

     Generative AI will be assisting with almost every human decision in the future. A personalized assistant that has immense context on your life, and all of your written and recorded information, will be an incredible superpower. In your ear at all times, helping you pick out products. Charting your life as it happens, able to craft an intimate biography of anyone at a moments notice. The writers of history, whether true or not, will be AI systems turning complex data from the real world into written data for future models. Just as we wonder what it would have been like to live in the ancient times, with little to no recorded history, and certainly the average life being entirely absent from recordings, we will look back on the modern day, similarly baffled.

    Right now, only the great men and women of our age have books written about them, and even social media only captures the small slice of purposeful content we allow. But in the near future, once we plug into the wondering, incredible aspects of generative assistants, there will be no where to hide. Setting aside the fact that sophisticated systems will be able to fairly accurately model our behaviors and thoughts given our backgrounds (and info gleaned from others' experiences), our behaviors will be so obviously and AI-driven that only the hermits will fade into history's unknown chapters. For the rest of us, there will be no place to hide.

Unemployment

     A three day work week actually just means unemployment is at 40%. Unless there is some mechanism from the government enforcing otherwise, the AI driven future does not result in the same pay and reduced work hours for all, it results in increased inequality. As long as the marginal value of human labor is above zero, the most qualified and productive workers in the workforce will remain employed (in their specified domain), but there will be reduced need for unskilled (which in this sense could be "white-collar-aka-unskilled") labor to the same effect.

    Why would you keep the same exact headcount, but only make people work three days a week instead of five? Given the increased productivity gains of AI, you could keep everyone employed for five days a week and have a much more productive workforce. Or if there were truly diminishing returns (for some reason), and you have the same salary expense budget, why not just keep the best 3/5 of employees for the full week and lay off the remainder?

    Unless governmental control (some flavor of socialism or communism) is enforced to maintain a fully employed workforce, there's not economic mechanism for the idealized 2-3 day work week. Either we are doing productive work, and biting the bullet that is economic theory, or we are economically obsolete. There is no cheerful middle ground, it just sounds good to say out loud.

Intelligence as a Commodity

      In some sense, current AI is commoditized. A $20 subscription of one model is somewhat equivalent to the next best-in-class. An open s...