Tech moguls have misinterpreted the economics of Artificial Intelligence (AI), echoing a warning from 19th-century economist William Stanley Jevons. In his 1865 book, Jevons cautioned that finite resources like coal would lead to increased costs and reduced competitiveness if not managed efficiently. He foresaw a scenario where clever use of limited resources would only accelerate the exhaustion of reserves, ultimately forcing countries to contract their economic size.
Jevons’ prediction has eerie parallels in today’s AI landscape. As DeepSeek’s breakthrough pushes forward, experts are now facing concerns about resource depletion and competitiveness. The rapid development of AI systems has sparked worries that companies may prioritize growth over sustainable practices, mirroring Jevons’ dire prophecy.
AI proponents must reassess their approach to resource management if they hope to avoid repeating Jevons’ warning. Without a balanced strategy that prioritizes efficiency and responsible resource allocation, the benefits of AI may be short-lived and ultimately unsustainable. As policymakers and industry leaders navigate the complex economics of AI, it is crucial to heed Jevons’ cautionary words and adopt a more sustainable approach to harnessing its potential.
Source: https://www.economist.com/finance-and-economics/2025/01/30/tech-tycoons-have-got-the-economics-of-ai-wrong