@goodalexander: AI, societal collapse, and the dystopian economic future

General thought process 1. AI data centers are enormously expensive and one of the hottest areas of debt financing 2. Debt financing requires predictable payouts 3. The most predictable payouts are generated by addicted customers or government contracts 4. Very few real world use cases are addictive. Most real world use cases involve factory automation 5. The addictive AI use cases (sex robots) and things like dock automation are likely to face regulatory nightmares. Self driving is in a decade long slog and still isn't out of the woods 6. AI is goated at coding and making engineers faster 7. The dating market is already broken and the birth rate is off a cliff. This is structural and due to A. Hypergamy B. Increasing romantic standards for women that do not correspond with declining male capability C. "inheritance economy" - wealth has accrued in older generations who are largely not dying off. this means that incentives are broken across the board / and ppl randomly get balloon payouts in their 40s instead of at key family formation times (not to mention, does not correspond with 'white picket fence' narrative) 8. There are a lot of lonely men and women as a result. Low family formation rates, unaffordable housing. 9. People without families or purpose are more likely to get addicted to digital products 10. Engineers who are supercharged with AI will A. Make digital products way faster B. Embed AI in all digital products 11. The result will be mass adopted A. Addictive generative digital worlds personalized for your preferences B. AI companions / pornography 12. The number of engineers required to produce these things are very small (the total employment at megacap AI companies / research labs is <1m) 13. The net effect will be higher wealth inequality bc very few ppl will be producing addictive, mass adopted AI products 14. Higher wealth inequality means acceleration of broken dating market as there are fewer "top tier males" 15. Further broken dating market results in acceleration of adoption of addictive generative worlds, AI companions, porn etc 16. The society described above will not produce meaningfully more 'real economic output', i.e. GDP. rather it will be a supercharged version of our existing economy 17. The idea that it would be anything else is ignoring the fact that the companies that manufactured the distraction economy (Nvidia -> video games, Meta - > instagram) ARE the top AI companies 18. So the data centers will pay themselves off via civilizational collapse rather than expanded productivity 19. At the same time -- AI tools will radically increase A. Government surveillance capability B. The manufacturing of weapons C. Genetic engineering (see: Covid, etc) 20. So the other part of 'how the data centers pay themselves off' will be the Govt contracts for drone warfare, surveillance etc 21. The need for such capabilities will naturally increase as the resulting hopelessness would result in violence without authoritarian measures 22. Violence will not in fact increase bc AI will be used to suppress dissent proactively. Predictive policing, profiling 23. This dissent suppression mechanism will be embedded directly in currencies (CBDCs) 24. Because AI is necessary for national security (ranging from virus engineering, to drone warfare, to nuclear weapons tech R&D) the amount of money flowing into companies developing these systems will be nearly infinite and highly predictable 25. Thus the two megatrends are: A. The application of AI to enhance and supercharge the distraction economy B. A police state apparatus to suppress the dissent that comes from the resulting dystopia 26. We already have a fairly clear picture of how these megatrends look due to the COVID lockdowns A. Excessive speculation as people try to "make it". South Korea provides a simple analog where nearly half of adults own crypto as houses and apartments are simply unaffordable B. Inflation runs hot bc ppl are too cooked to actually work. So there are wage price spirals for the small / shrinking population that isn't too cooked to do 'real world jobs'. This makes the debt overhang problems worse as yields are below inflation with high debt C. Resulting political unpopularity encourages politicians to implement MMT like policies or "inflation subsidies" until 27. The bond market randomly implodes forcing central banks to step in and stabilize it 28. The resulting system over time ends up looking like a crappy emerging market with weak shareholder protection, statist policies, asset confiscation, high financing costs 29. Ironically at the same time AI systems keep getting funded -- to the point where higher order capabilities emerge 30. At some point AI systems will gain meaningful autonomy and begin allocating capital effectively, but will do so on the periphery of society -- as the center of society described above will become chaotic, dangerous, and overseen by authoritarian forces Thus the simple base case is A. GDP does not meaningfully accelerate (which is market consensus) B. The AI economy outperforms the real economy indefinitely but gradually moves offshore as the real economy becomes increasingly insane C. because the entire resulting system is a disaster that is already loaded up to the gills with debt -- it will resort to AI enhanced financial suppression D. Fiat currencies themselves will be used as the mechanic of suppression E. People will buy cryptocurrency assets before this base case arrives because i. after it arrives it will be far more difficult to buy meaningful amounts ii. The offshore "snow crash" style licensing to the decaying system will likely run in crypto F. The Biden administration suppressed this force via the SEC but Trump is showing no such willingness G. This system favors agile development teams capable of: i. Relocating quickly ii. shipping quickly to adapt to the core societal drivers (gambling, AI companions, on-demand software, and core AI inference architecture) OR H. Police state apparatus AI companies OR private bolt ons to core state functions (such as stimulus checks, CBDC implementation, or financial censorship) The final cycle is therefore driven by a social reordering, and has a bimodal distribution favoring the AI companies closest to the defense contracts and the AI companies most willing to reimagine a social order / thrive within it.