I think this would only work if the investors themselves would save the operation costs of those 10^7 people which seems unlikely—if Sam wants to create AGI and sell that as a service, he can only capture a certain fracture of the gains, while the customers will realize the remaining share.
You’re right. My analysis only works if a monopoly can somehow be maintained, so the price of AI labor is set to epsilon under the price of human labor. In a market with free entry, the price of AI labor drops to the marginal cost of production, which is putatively negligible. All the profit is dissipated into consumer surplus. Which is great for the world, but now the seven trillion doesn’t make sense again.
I think this would only work if the investors themselves would save the operation costs of those 10^7 people which seems unlikely—if Sam wants to create AGI and sell that as a service, he can only capture a certain fracture of the gains, while the customers will realize the remaining share.
You’re right. My analysis only works if a monopoly can somehow be maintained, so the price of AI labor is set to epsilon under the price of human labor. In a market with free entry, the price of AI labor drops to the marginal cost of production, which is putatively negligible. All the profit is dissipated into consumer surplus. Which is great for the world, but now the seven trillion doesn’t make sense again.