AI is Creating a Pitfall in Global Economy

We’ve been sold the same glossy story about artificial intelligence: it will make everything cheaper, faster, and more efficient. Machines will handle the grunt work, businesses will save fortunes, and productivity will skyrocket.

At first glance, it sounds inevitable. Imagine a company letting go of its skilled copywriter—once paid $100,000 a year—and replacing them with an AI subscription that costs just $30 a month. That feels like a triumph of efficiency. But look closer, and the illusion starts to crack.

The company’s electricity bill goes up. Its cloud costs rise. New software subscriptions pile on. The “savings” evaporate. The money didn’t vanish—it just moved.

The Real Economy of AI

What’s happening isn’t unique to one job or one industry. Artificial intelligence is driving down the price of human labor in writing, design, translation, coding, customer support, and research. Economists call it deflation at the margin—the cost of producing one more unit of work collapses to nearly zero.

But instead of making life cheaper, the opposite is happening. The reason is simple: while AI is crushing the cost of labor, it’s inflating the cost of everything else.

AI doesn’t run on ideas—it runs on hardware. Massive data centers, advanced chips, high electricity use, cooling systems, bandwidth, and endless cloud infrastructure. Training models is expensive; running them never stops. As economies digitize further, the baseline cost of simply existing in that ecosystem keeps climbing.

The Wealth Transfer Hidden in Plain Sight

This is the oldest story in technological history. Each revolution makes one thing cheaper—while making something else far more valuable.

The printing press made books affordable, but created the need for education, literacy, and eventually degrees. Each layer of “democratization” raised the cost of staying relevant. AI works the same way: it democratizes output but centralizes profit.

The real money isn’t in writing prompts or building chatbots. It’s in owning the infrastructure—the chips, the data centers, the cloud platforms, and the energy that power them. The companies at the top of the AI food chain are the ones “selling the picks and shovels” while everyone else is digging for digital gold.

Not a Worker Problem—A Positioning Problem

The great AI shift isn’t about fear of automation. It’s about positioning in the value chain.

If your income comes from hours sold or repeatable tasks, AI is your competitor. But if your income is tied to assets, ownership, or scalable leverage, AI multiplies your returns. Each technological boom isn’t just innovation—it’s a wealth transfer, dressed up in the language of progress.

So the real question isn’t whether to use AI. It’s how—and where—you stand in the new economy it’s building. Because in every gold rush, most people dig. And a few sell the shovels.

And that’s where the profit has always been.