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Tech Tycoons have Got the Economics of AI Wrong

Even as financial growth was just taking off, some financial experts were already pessimistic. Coal, wrote William Stanley Jevons in 1865, is “the mainspring of modern material civilisation”. Yet it was limited and would quickly go out. Although more could be found by digging deeper, it would be increasingly pricey to extract and these higher expenses would reduce the competitiveness of Britain’s manufacturers. After all, in other nations the black fuel was still in sight of daytime. Efficiency gains-using less coal to produce the very same amount of not save the nation. Indeed, cleverer use of minimal resources would simply provide a reward to burn a lot more coal, which would, paradoxically, cause an even quicker usage of British reserves. There was no escape, the Victorian economic expert thought. Coal would be exhausted and the nation was most likely to “agreement to her former littleness”.

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This article appeared in the Finance & economics section of the print edition under the heading “Rocked by DeepSeek”

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Tech magnates have got the economics of AI incorrect

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