Top economist Steve Hanke told us why he doubts AI will be the job destroyer many expect
Steve Hanke said simple economics explains why companies "won't be firing everybody and replacing them with AI."
Economist Steve Hanke expresses skepticism over AI's potential to replace jobs, stating that the technology is "incredibly costly" due to the substantial resources required to power it, including water, power, and microchips. Hanke points out that many companies, such as Microsoft, Alphabet, Amazon, and Meta, have projected significant capital expenditures for AI-related infrastructure, with combined investments of $700 billion this year and $1 trillion by 2027.
Despite some optimism about AI's potential to boost productivity and drive down costs, Hanke dismisses these claims as unrealistic, describing them as the product of "idiotic economic reasoning." He criticizes AI proponents for comparing the technology to software, failing to acknowledge the additional costs associated with creating and maintaining AI systems.
Hanke warns that the "cost of scarce resources" consumed by AI will ultimately dictate the extent of the "AI revolution." Despite some predictions of AI's transformative potential, Hanke remains doubtful, describing AI as "overhyped and potentially dangerous."
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