Steve Hanke, an applied economics professor at Johns Hopkins University, states that businesses cannot achieve savings by replacing all employees with artificial intelligence systems. Hanke argues that this transition often results in costs higher than employing humans.
Hanke does not consider views suggesting that advanced AI will become free or nearly free in the future to be realistic. He explains that AI requires significant amounts of electricity, water, data center infrastructure, and physical capital to operate.
Unlike traditional software, AI consumes continuous resources as long as it is running. Hanke maintains that AI should not be evaluated as a standard software product, suggesting its future will be shaped by economic realities rather than technological developments alone.
The cost of the limited resources consumed by AI will determine the industry's growth rate and the fate of any potential AI bubble.
Industry Perspectives and Projections
Nvidia CEO Jensen Huang argues that while AI hardware and operations are currently expensive, costs will decrease significantly over time due to efficiency gains.
The development and widespread adoption of AI will require approximately $5 trillion in annual investment until 2040.
Masayoshi Son has rejected the view that an AI bubble is forming in the market.
Elon Musk suggests that AI will take over most tasks within the next 10 to 20 years, leading to a society where people live on high levels of government-provided universal income.
Corporate Spending and Implementation
Research published in June indicates that many employers have overestimated the productivity gains and cost advantages offered by AI. Consequently, companies such as Ford and Klarna have begun rehiring some employees in positions previously replaced by AI after failing to achieve expected efficiency.
Estimated annual investment required for AI adoption by 2040, according to SoftBank founder Masayoshi Son
