"Econ 102" with Noah Smith and Erik Torenberg Who Profits from AI?
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Aug 27, 2025 The discussion dives into how AI is transforming the economy, influencing both job markets and business profitability. There's a fascinating exploration of how AI can lower unemployment in some sectors while causing displacement in others. Historical parallels are drawn to past market crashes, like the dot-com bust, and the profitability challenges industries face. The conversation also touches on the evolving roles of venture capital in AI and the potential economic risks associated with data centers, hinting at a complex and dynamic AI landscape.
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AI Hasn't Replaced Workers Broadly Yet
- Current data shows unemployment is rising in jobs that use AI less, not in AI-heavy occupations.
- This suggests AI hasn't broadly replaced workers yet and effects are complex and indirect.
Mistaking Humans For AI During Waymo Ride
- Noah recounts hearing a human customer-support voice during a Waymo incident and jokingly asking if it was Gemini.
- The human agent insisted he was not AI while Noah and friends treated him like an automated system.
Importance Doesn't Equal Profit
- AI's ubiquity doesn't guarantee profits for AI providers, just as food production didn't make farmers rich.
- Important, commodified goods can under-deliver profits if the market is highly competitive and undifferentiated.