The AI Tsunami: Abundance vs Scarcity
AI and robotics promise hyper-growth while the foundations of income, labour, and value are crumbling. Governments face an unprecedented question: how to generate revenue in an era of abundance.
AI and robotics promise hyper-growth, but the foundations of income, labour, and value are crumbling beneath the surface.
Governments face an unprecedented fiscal question: how to generate revenue in an era of technological abundance where marginal cost approaches zero. Musk's formulation is blunt — 'prices collapse hard.' Production compounds exponentially while money supply grows linearly.
For investors, this creates a bifurcated world. Asset owners benefit from deflation in goods and inflation in assets. Those dependent on labour income face sustained pressure. The investment implication: overweight scarce assets (land, bandwidth, attention, elite talent) and underweight commoditised labour-intensive sectors.
The macro regime we are entering rewards capital allocation skill more than at any prior point in history. The spread between good and poor capital allocation decisions will widen dramatically over the next decade.
