"Hinton was commenting on enormous investments in the AI industry, despite a total lack of profit so far. By typical investment standards, AI should be a pariah. There's historical precedent for this - tech observers and economists typically point to periods known as " AI winters," stretches of time when funding for AI research and development slowed to a crawl."
"As Fortune noted, OpenAI alone has accounted for over $1 trillion in AI infrastructure deals, and still managed to lose some $11.5 billion in revenue over the last three months. Asked by Bloomberg whether these jaw dropping investments could ever pay off without eviscerating the job market, Hinton's reply was telling. "I believe that it can't," he said. "I believe that to make money you're going to have to replace human labor.""
"Since it first emerged out of feudalism centuries ago, the market economy has relied on the exploitation of human labor - looms, steel mills, and automobile plants straight up can't run without it. The issue is that human labor comes with a cost to the factory owner, namely: wages. For an investor, a corporate executive, or a tech tycoon, AI represents the answer to the question of human labor, which eats into profits."
Massive corporate investment in AI continues despite limited profits, driven by expectations that automating tasks will cut labor costs and increase returns. Historical cycles show AI funding can collapse during 'AI winters' when promises fail to materialize. Large deals and infrastructure spending coexist with substantial reported losses, highlighting the speculative nature of the industry. To generate significant profits at scale, companies appear likely to prioritize replacing human labor, which would reduce wage expenses but threaten employment. The widespread substitution of paid labor with automated systems risks concentrating wealth, destabilizing job markets, and producing an economic dystopia.
Read at Futurism
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