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0 pointsbaxtr3d ago0 comments

I wouldn’t say it’s impossible but I’d argue from all we know now highly unlikely.

Why? Assume a company has a high margin because they used AI and reduced their workforce by 10x. What usually happens is that a new competitor comes in and offers the same for half the price.

Since AI is lowering the bar for entry this process should be even faster than previously.

0 comments

Epa0953d ago

What usually happens is that that competitors then gets disappeared. Either by a happy ending (it gets bought up), or it gets squeezed out.

Monopolies arise naturally unless we work hard to avoid them.

baxtrOP2d ago

Monopolies stay stable only with a sustainable competitive advantage, eg through network effects or patents.

With no barriers, margins get squeezed out rapidly.

bluefirebrand3d ago

> Assume a company has a high margin because they used AI and reduced their workforce by 10x. What usually happens is that a new competitor comes in and offers the same for half the price.

Wouldn't you need 10x the number of competitors to get back to the same amount of employees, assuming they are running with similar workforces?

baxtrOP2d ago

Yes, true for existing companies.

On the other hand we still don’t know which new companies will be created that couldn’t be be created before due to unfavorable economics.

j / k navigate · click thread line to collapse

0 pointsbaxtr3d ago0 comments

I wouldn’t say it’s impossible but I’d argue from all we know now highly unlikely.

Why? Assume a company has a high margin because they used AI and reduced their workforce by 10x. What usually happens is that a new competitor comes in and offers the same for half the price.

Since AI is lowering the bar for entry this process should be even faster than previously.

0 comments

Epa0953d ago

What usually happens is that that competitors then gets disappeared. Either by a happy ending (it gets bought up), or it gets squeezed out.

Monopolies arise naturally unless we work hard to avoid them.

baxtrOP2d ago

Monopolies stay stable only with a sustainable competitive advantage, eg through network effects or patents.

With no barriers, margins get squeezed out rapidly.

bluefirebrand3d ago

> Assume a company has a high margin because they used AI and reduced their workforce by 10x. What usually happens is that a new competitor comes in and offers the same for half the price.

Wouldn't you need 10x the number of competitors to get back to the same amount of employees, assuming they are running with similar workforces?

baxtrOP2d ago

Yes, true for existing companies.

On the other hand we still don’t know which new companies will be created that couldn’t be be created before due to unfavorable economics.

j / k navigate · click thread line to collapse