AI Stumps Economists! Buffett Reveals Question That’s Baffled Experts for 100 Years / Buffett: AI Poses a Question No Economist Can Answer (It’s About Your Job!)
The first to acknowledge his ignorance about artificial intelligence is Warren Buffett. That is consistent with his long-standing belief to avoid using technology that is out of his reach. He stated over the weekend at the Berkshire Hathaway annual meeting that his enormous interest in Apple, for instance—his greatest stock holding even if it has been reduced—came about more as an epiphany tied to its consumer success than as a technical gamble.
However, the billionaire investor and CEO and chairman of Berkshire couldn’t steer clear of the topic of artificial intelligence when it came to the keenly anticipated event in Omaha this year. Buffett answered a number of inquiries concerning AI. Buffet referred to AI as “profound” and claimed that, like a “genie,” the technology may have devastating consequences if let loose.
The biggest concerns he sees are the enormous scamming potential made possible by AI and the possibility of a scientific discovery that could have unexpected repercussions and endanger civilization on a par with nuclear weapons. Buffett added that when it comes to the influence of AI on the globe, which has the potential to drastically alter everyone’s daily life, there is at least one question that no one can truly answer. He said that for a century, the greatest economists have struggled to answer this question. According to Buffett, “it can create an enormous amount of leisure time.”
“Now, it’s another question what the world does with its leisure time. “I am aware that many individuals initially desire leisure time when they go to work, but I actually enjoy solving more problems,” said Buffett, the well-known actor who made headlines decades ago for claiming to have “tap danced” to work in his Omaha office.Buffett cited the work of one of the most influential economists of the modern era, John Maynard Keynes, who accurately predicted that output per capita would grow at an exponential pace but miscalculated about what people would do with greater productivity.
The books “The General Theory of Employment, Interest, and Money,” which Buffett suggested adding to a reading list, and Keynes’s advocacy of government intervention through social and job programmes to stabilise the economy during economic downturns like the Great Depression have made him the most well-known figure in macroeconomics. Over the last few quarters, productivity has increased dramatically.BLS data indicates that following a significant productivity rise during the Covid pandemic, there was a prolonged slump. The data has only come back over the past four quarters, with annual growth of about 3%. Corporate executives are now questioning whether factors, such as AI or return-to-office rules, could be at play in this resurgence.
However, most argue that the technology is still too early to draw any meaningful conclusions, differentiating between generative AI, which is the talk of the town right now and will take some time to manifest itself in data, and AI that has been in use for years and where gains are measurable. Additionally, because quarterly official data is frequently subject to significant modification and it might take years to find a large change in the productivity trend line, economists advise against reading too much into any short-term productivity rise. Even if it’s not there today, AI will eventually play a significant role in worker productivity.
Gary Cohn, the former head of the National Economic Council and vice chair of IBM, stated last week on CNBC that while productivity improvements are occurring more slowly, AI adoption is going faster. He stated, “Every company is looking at AI and deciding where it will help them,” in a recent appearance on “Money Movers” on CNBC. “In the productivity game, we are going to evolve into this, and it will feed through the economy slowly,” Cohn stated. “I don’t think we’ve seen the real productivity boost from AI,” he continued, nevertheless. The majority of businesses are still in the process of determining how much money to allocate for AI, developing a broad plan for how it can benefit both clients and staff, and attempting to move into implementation mode.
CEO of MongoDB Dev Ittycheria recently told CNBC that executives are starting to wonder when they will see the value and return on AI. His business, which unveiled a set of tools last week to assist companies “overwhelmed by AI,” Now that the market is moving past the stage where value is only being created at the bottom layer—Nvidia and ChatGPT/OpenAI, for example—it is imperative that businesses get ready for the apps that will be developed on top of that infrastructure.
There is a clear tendency toward “agentic” processes, in which agents act independently on behalf of the end user. Though it’s still a while off, developers must create apps, improve user experiences, reduce costs, and come up with fresh strategies for expanding their businesses.