Transcription
Brand US has fallen furthest, fastest. The second greatest fall is AI. Your view of AI is directly correlated to your wealth. The only cohort that has a positive rating of AI is people making over $200,000. Cuz generally speaking, wealthy people look at AI as something that's fueling their portfolios. And uh, wealthy people are the biggest users of AI. So they see it as a positive. They see it as innovation. They see it as the S&P going up.
But if you're an average middle-class person, what you may see is that your electricity bills have gone up. And you don't even have access to invest in these companies. And you see some statements from people like Sam Altman saying, "Stop complaining about energy costs. Think about the amount of energy it takes to raise a child." So they haven't really managed the brand well. In the last 18 months, it's gone from something kind of scary, but we can be optimistic and a wealth creator, to something that's very scary. And something that's a wealth creator for the wealthiest already. The brand in the last 18 months has had tremendous, tremendous erosion.
When I look at some of the quotes from the CEOs of these AI companies, I've got one here from Elon that says, "AI and robots will replace all jobs. Working will be optional, like growing your own vegetables instead of buying them from a store. The challenge will be fulfillment. How do you derive fulfillment and meaning in life?" And Sam Altman said, "By the end of 2028, more of the world's intellectual capacity could reside inside data centers than outside them." And when I went through Sam's blog several times, I mean, he's talking about a fairly dystopian future. And many of the CEOs, I mean, even Amadeo and Profit talks a lot about, you know, his his bear case for AI and the job disruption that will follow.
And so I think I'm trying to get clarity for myself, really, on like, what, what is the truth? What's marketing and what's the truth? And I want to add another point, which is I hire a lot of people. Yep. And I'm already finding that our framework, specifically for entry-level roles, Yep. has has quite radically changed. And so I didn't believe this stuff. Like, a lot of people told me that, oh, Sam Altman, these guys, they're doing marketing to make their company seem powerful. But then when I noticed a change in my own behavior, when I'm sifting through these CVs, Yep. I thought, oh, maybe things are going to change.
I think it's mostly [ __ ] and catastrophizing and a means of fundraising. Every technology in history goes through a similar arc. There's some catastrophizing. There's some job loss. That increase in productivity results in additional margin, new business opportunities, and employment grows. I don't see any reason why this would be any different. And I think the catastrophizing and talking about this massive destruction in jobs is a way of saying or justifying the massive investments these companies want enterprises to make in their companies. Cuz if you look at the amount of capital they have committed and the valuations of these companies, one of two things needs to happen in the next five years, at least in the US. There either needs to be a trillion dollars in incremental revenue from new products from companies that have licensed AI. So L'Oreal does a big site license with, say, OpenAI. Does it come up with new products? Like, how does it justify that investment? We're not seeing a lot of AI moisturizer or cars that are built by AI. I mean, there's AI has hit industrialized robots in Amazon. But there's not a lot where you would call new AI-driven or AI products. AI plays a role in the background. But it's very hard for companies right now to point to incremental growth or revenues from AI. So in order to justify these valuations, then they have to say, all right, there's going to be massive cost savings or efficiencies. And there's some examples. I think Meta, Meta has just announced new layoffs because of efficiencies they're getting with AI targeting. So one of two things needs to happen in the next three, three years. Either these companies' valuations need to be cut by 50 or 70%, or you need a massive destruction in the labor market that creates tons of efficiencies that their customers can then flow to the bottom line.
And I think what the CEOs are saying is that there's going to be massive efficiencies. I also think that you sound more interesting and it makes your technology sound more seminal when you say it's changing the world and we don't know how to control it. And quite frankly, I find it a little bit obnoxious that some of the founders and key figures in AI catastrophize just about the time they take a secondary and peace out to the Côte d'Azur. That's not helpful. I'm, I'm Dr. Frankenstein, and I've created this monster, but I don't know how to deal with it, so I'm going to go peace out to Saint-Tropez. That's just not very helpful. They always talk about the peril. So, but what do you mean by that? So the first, the first big fear, catastrophizing is just this unprecedented job destruction. I've been talking about that for three years, but let's look at the data. The unemployment rate in the US is 4.5%. Among youth, it's 8.8%. That is slightly below the historical average. The number of new business permits or new businesses started per capita in the United States has doubled in the last 10 years. And we hear about, well, what about Meta? They announced they're laying off, I think, 8 or 10,000 people yesterday. 2019 to 2025, they went from 16,000 people to 80. So even if they go back to 60,000, it takes them back to, it takes them back about 24 months. So I don't doubt that there'll be a real dip or a severe V down in certain industries, customer service, probably the legal field. But I believe over the medium and the long term, it's actually going to create more jobs than it destroys. And I don't, I think some of the catastrophizing is nothing more than a thinly veiled attempt to say my technology is so devastating that it's going to shift society and you should invest at this crazy valuation.
Could you be wrong? Oh, 100%. I'm not all the time, Stephen. Yeah, but I mean, like, what's the, what's, what would have to be the case for you to find out that you were wrong in terms of how you've reasoned up from the first principles of your thinking that? Job destruction, layoffs. >> But what would you have misunderstood for that to be the case? Like, what, what did you miss? Would you have misestimated for that to be the case? Ground zero for the job that was going to go away was radiologists. You could scan billions of images and radiologists, kid mama, don't let your your daughter grow up to be a radiologist, cuz that job's going away. The new job listings for radiologists in 2026 is up. Because what it ends up is that while scanning the image is important, it's a small part of the job. The value out of a radiologist is diagnosing the illness and then coming up with a treatment plan. And that's as important as ever. The number of coders, job listings for coders year on year is up 11%. So people who understand how to use these technologies and come up with different prompts or different means of vibe coding, that demand has gone up because now AI can be applied to almost any startup. Where I will be wrong is if there is sustained job destruction and the new jobs created and new businesses and the employment those jobs create doesn't keep up with new jobs. And there is a scenario. You don't need 100% unemployment like Musk is predicting. At 20% unemployment, the French had a revolution and Weimar Germany turned very ugly. At 20% unemployment, especially among youth, especially young men, tend to get very angry and take to the streets. So you could see a V that's so severe, even if there's a job recovery, if it hits 20% unemployment, that could cause real civil unrest. But I just look at the data. I look at the employment numbers. If you didn't know there was this seminal technology that very smart people were predicting predicting a job apocalypse around and you just looked at the data, you wouldn't know there's anything going on. The the data doesn't reflect that there's some big exogenous meteor meteor coming for the employment market.