Replacing labor with AI shifts costs to compute – and compute is still expensive (opens in new tab)

Unless someone discovers a breakthrough technology that decreases the cost of inference exponentially.

AI in production at scale is too costly.

This is mainly a cost structure because AI replaces variable labor costs with costs of GPUs, energy, infra etc... ; so at current prices running models at scale can easily be more expensive than human pay for the tasks with a low marginal value. If that doesn’t change as expected the economics of automation becomes less intersting.