An AI capitalism primer

Who’s really making money from the AI boom?

Claire Anderson (hi Claire!) asked me to break down the economics of AI. How is it going to make money, and for whom?

In this post I’m not going to talk too much about how the technology works, and the claims of its vendors vs the actual limitations of the products. Baljur Bjarnason has written extensively about that, while Simon Willison writes about building tools with AI and I recommend both of their posts.

The important thing is that when we talk about AI today, we are mostly talking about generative AI. These are products that are capable of generating content: this could be text (for example, ChatGPT), images (eg Midjourney), music, video, and so on.

Usually they do so in response to a simple text prompt. For example, in response to the prompt ‌Write a short limerick about Ben Werdmuller asking ChatGPT to write a short limerick about Ben Werdmuller, ChatGPT instantly produced:

Ben Werdmuller pondered with glee,
“What would ChatGPT write about me?”
So he posed the request,
In a jest quite obsessed,
And chuckled at layers, level three!

Honestly, it’s pretty clever.

While a limerick isn’t particularly economically useful, you can ask these technologies to write code for you…