2nd order effects of AI, running notes

I write to increase clarity and surface area. Views strictly personal.

If not for love and excessive caffeine, recent pace of AI advancements is the only thing that has generated the feeling of excitement, paranoia, optimism and marvel all at once. For real, my heart rate is increasing as I type.

Number of disparate pages where I had jotted ideas on this topic was getting out of hand so the right time to pen down a post. Some of it is repetitive, but I hereby command my future agent to fix it with a light hearted vibe.

Revisiting ECON F211, scarcity drives value.

Scarcity of knowledge was removed with internet. Scarcity of being able to retrieve that information and condense it just went away with AI. Scarcity of being able to make judgement calls on the information is here to stay.

It’ll be slower than expected

Imagine the number of times you wished someone (or even you yourself) Googled before asking something. 10 years later it’ll be GodGPT instead of Google, just a little less frequent.

Chess, poker and painting

In a foreseeable future with humans and agents co-existing, anything

1. predictable and methodical that feels easier than playing chess will be done by AI agents. Think- sending out cold emails.
2. methodical that feels as challenging as playing chess will be done by humans with AI agent support with control slowly moving towards agents as humans build comfort. Think- architecting payment systems.
3. that feels like poker aka probabilistic outcomes will be done by humans. Think- deciding which products to launch and which markets to enter.
4. creative will be done by humans, though some will use AI aid to short circuit time to reach threshold capability

Trust, credentials and nepotism

You remember the covid era where anyone could sit behind a screen, deploy a skill and work their way upto riches? That’s gone.

In a world where all raw skill work is done by agents, true value of humans is in judgement. Letting someone practice judgement comes from trust. Trust is built by

1. Past track records- tough to switch fields
2. Familiarity- face time, having things in common
3. Stamps of approval- flashy degrees more imp than ever

Teaching judgement is also deep apprenticeship. When there is no way to display skills to qualify for apprenticeship, superiors will resort to irrelevant competitive data points (ex. highest scorer in standard exams) and nepotism.

My contrary opinion is that AI will lead to even more competitive measures to filter out candidates for apprenticeship since giving lower level tasks (think- analysts) to gauge passion for field and ability to do those wouldn’t make economical sense.

This is extremely bad news for people early in their career (incl. me!). We should optimise for getting past the stage of displaying craft to exercising judgement asap!

Careers that are immune

1. General rule of thumb- senior roles more immune than junior roles, exponentially
2. Anything that involves lots of critical decision making
3. Roles where presence of humans gives comfort, apart from hard value. For the first time consulting and investment banking seem more lucrative than product management and engineering.
4. High stake tasks- ex. medicine
5. Ones that require high taste, ex. music production
6. Game design

Back to the 80s

Humans will move away from apps at a breakneck speed. Want to book a ticket? Just tell your agent that will book the most optimum ticket. Why go to some website?

Why would agents be apps? They would be owned by devices.

So, value will be captured by devices, aggregate databases (thin margins since agents don’t have loyalty and can query them all) and actual service providers (hotel in the case of travel).

80s was monetised by devices, databases and actual service providers. Maybe 2040s will be the same. If I was running a scaled travel site right now I’ll leverage as much as possible and buy actual hotels.

Bye bye UI UX

No way humans will do anything apart from typing, speaking, scrolling and tapping 2/3 buttons. An exception of this will be games since humans love to engage in complex flows that generates dopamine.

Business models that will be immune

1. Anything that requires licenses (incl. fintech ❤)
2. Devices
3. Brands
4. Hardcore IP businesses
5. Anything that can capture disproportionate distribution
6. Owning assets, atoms > bits
7. Manufacturing

Indians will get relatively better at writing

Indian schools won’t get around allowing GPT for another 20 years so students will keep practicing how to write without the aid of GPTs.

Humans having even lesser attention spans

Till now, quick consumption has attacked our attention spans. Creation was a task where you would get into a state of flow and focus for long hours. Not anymore.