OpenAI investor Vinod Khosla thinks that while artificial intelligence (AI) will have a major impact on the global economy, the key question is how economic health will be measured in such an environment.
What Happened: Khosla's comments come at a time when billionaires – including OpenAI CEO Sam Altman – are wondering when interest rate cuts will begin.
Khosla's question about measuring economic health and performance is pertinent to understanding how policies should be framed in an AI-driven world in the future.
See Also: OpenAI’s Sam Altman Is ‘Feeling Good’ About This Prediction He Made 27 Months Ago
He predicts that artificial intelligence (AI) will lead to a deflationary environment for the next 25 years. In such a scenario, prices of goods and services will come down, which will have an impact on the profitability of companies.
"Capital should be scarce for a while, current measures of GDP and the economy will be less relevant but goods and services should be in great abundance," Khosla said.
"The key question is what are the right measures and the right questions," he added.
Why It Matters: Lower profitability could hamper the ability of companies to spend more on research and innovation, thereby slowing down the progress.
This scenario has led even Altman to wonder how economic policies will be framed to maintain the pace of innovation. Billionaires are expecting a surge in AI-powered breakthrough in innovations, especially in the healthcare sector.
Like Khosla, even Musk thinks that the supply of goods will be abundant, but we are not at that point, yet, and reaching there would require more funding for research.
That ties in with Altman's question, where he asks, "At what rate should you be willing to borrow money to build a data center if extremely powerful AI is close at hand?"
Right now, interest rates are at a 22-year high of 5.25%-5.50%. Billionaire hedge fund manager Bill Ackman has predicted that we could see the Federal Reserve cut rates as early as the first quarter of 2024. It remains to be seen if that prediction turns out to be accurate.
Image Via Flickr
Check out more of Benzinga's Consumer Tech coverage by following this link.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
