DAMBISA MOYO
The current pace of advances in generative artificial intelligence makes it difficult to forecast how the technology will affect the economy, business, and society. Nonetheless, it already seems clear that the new AI applications will produce a narrow cohort of winners and lead to a smaller workforce, confronting governments with big policy challenges.
Consider how AI will affect the three key components of growth: capital, labor, and productivity. In terms of capital, the massive volume of investment required to power AI innovations ensures that there will be a smaller, more concentrated set of winners. Big Tech firms with monopolies in their respective markets are the only ones that can afford the enormous costs associated with developing, training, and powering large language models (LLMs).
Most of these costs come from running high-end graphics processing units (GPUs), and from powering and cooling enormous data centers. Sam Mugel, the chief technology officer of Multiverse, estimates that training the next generation of LLMs will soon cost at least $1 billion. In 2023 alone, the Magnificent Seven – the top technology companies in the United States –allocated a combined $370 billion to research and development. That is roughly equal to the European Union’s total R&D budget (counting both businesses and the public sector).
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