Top economist Steve Hanke told us why he doubts AI will be the job destroyer many expect (www.businessinsider.com)

Economist Steve Hanke shared his skepticism towards the notion that artificial intelligence (AI) will soon become a costless solution that destroys jobs en masse. In a recent interview, Hanke emphasized that AI is resource-intensive, requiring significant investments in water, power, and hardware like graphics chips. Major tech firms, including Microsoft, Alphabet, Amazon, and Meta, are expected to allocate nearly $700 billion this year alone to enhance their data center capabilities, with projections soaring to $1 trillion by 2027. Hanke argues that employers are unlikely to replace human workers with AI, as the costs associated with AI can be higher than maintaining a human workforce. Hanke criticized AI proponents for oversimplifying the technology's economic impact, likening their claims to comparing apples and oranges; while software can be replicated at negligible costs after development, AI incurs ongoing expenses. He expressed concern that the economic viability of AI will depend on the availability of scarce resources required for its operation. This perspective contrasts sharply with views from industry leaders like Elon Musk, who envisions a future where AI significantly boosts productivity and diminishes costs. Hanke's warnings are echoed by other prominent figures, such as Mark Cuban and Michael Burry, who highlight the precarious nature of AI's dependence on companies like Nvidia and caution that the industry's rapid spending could lead to instability.