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THE 2028 GLOBAL INTELLIGENCE CRISIS

james22

By james22
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james22 Grand Master

james22

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For the entirety of modern economic history, human intelligence has been the scarce input. Capital was abundant (or at least, replicable). Natural resources were finite but substitutable. Technology improved slowly enough that humans could adapt. Intelligence, the ability to analyze, decide, create, persuade, and coordinate, was the thing that could not be replicated at scale.

 

Human intelligence derived its inherent premium from its scarcity. Every institution in our economy, from the labor market to the mortgage market to the tax code, was designed for a world in which that assumption held.

 

We are now experiencing the unwind of that premium. Machine intelligence is now a competent and rapidly improving substitute for human intelligence across a growing range of tasks. The financial system, optimized over decades for a world of scarce human minds, is repricing. That repricing is painful, disorderly, and far from complete.

 

But repricing is not the same as collapse.

 

The economy can find a new equilibrium. Getting there is one of the few tasks left that only humans can do. We need to do it correctly.

 

This is the first time in history the most productive asset in the economy has produced fewer, not more, jobs. Nobody’s framework fits, because none were designed for a world where the scarce input became abundant. So we have to make new frameworks. Whether we build them in time is the only question that matters.

73 Reds Grand Master

73 Reds

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33 minutes ago, james22 said:

For the entirety of modern economic history, human intelligence has been the scarce input. Capital was abundant (or at least, replicable). Natural resources were finite but substitutable. Technology improved slowly enough that humans could adapt. Intelligence, the ability to analyze, decide, create, persuade, and coordinate, was the thing that could not be replicated at scale.

 

Human intelligence derived its inherent premium from its scarcity. Every institution in our economy, from the labor market to the mortgage market to the tax code, was designed for a world in which that assumption held.

 

We are now experiencing the unwind of that premium. Machine intelligence is now a competent and rapidly improving substitute for human intelligence across a growing range of tasks. The financial system, optimized over decades for a world of scarce human minds, is repricing. That repricing is painful, disorderly, and far from complete.

 

But repricing is not the same as collapse.

 

The economy can find a new equilibrium. Getting there is one of the few tasks left that only humans can do. We need to do it correctly.

 

This is the first time in history the most productive asset in the economy has produced fewer, not more, jobs. Nobody’s framework fits, because none were designed for a world where the scarce input became abundant. So we have to make new frameworks. Whether we build them in time is the only question that matters.

Interesting read.  Seems as if the primary objective of AI might just be to help humans adapt to AI(?)

gfp Grand Master

gfp

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Posted

The rebuttals are as dumb as the citrini piece.  The details in a hypothetical don't really matter.  The point is that AI being applied to everything it can be will be incredibly disruptive to the current order of things including employment and "the economy."  If you listened in school, capitalism is super depressing for every business eventually.

 

We will have abundance and an absolute shit show of unemployment and government welfare all at the same time.  It's gonna be rough.  Encourage your kids to end up on the right side of it.

 

KJP Mentor

KJP

Posted
Posted (edited)
22 minutes ago, gfp said:

The rebuttals are as dumb as the citrini piece.  The details in a hypothetical don't really matter.  The point is that AI being applied to everything it can be will be incredibly disruptive to the current order of things including employment and "the economy."  If you listened in school, capitalism is super depressing for every business eventually.

 

We will have abundance and an absolute shit show of unemployment and government welfare all at the same time.  It's gonna be rough.  Encourage your kids to end up on the right side of it.

 

 

Well, I did say "attempted"!

 

I agree that finding an acceptable long-run result in a simplified 50+ year overlapping generations models isn't really responsive to the claim that the near to intermediate term ride may get very bumpy. 

 

Edited by KJP
Milu Experienced

Milu

Posted
Posted
2 hours ago, james22 said:

What if our AI bullishness continues to be right...and what if that’s actually bearish?

 

https://www.citriniresearch.com/p/2028gic

Didn’t think too much of it other than a great work of fiction. That said I think there are massive unpredictable changes coming in next 5-10 years. Makes it very challenging to know where to put your money. 

Eldad Mentor

Eldad

Posted
Posted

I’m probably completely wrong but I have been contemplating a big Ben Graham investment style comeback from AI. 
 

1. A lot of the monopoly powers we have seen building for 30+ years may get blown up. Returning most companies to the sort of 12% bond WB talks about. 
 

2. Capitalism may start to resemble warfare more. I counter you with this which causes you to counter me with this causing a more classic scenario where a company with outsized profits causes its own future problems and vice versa as competitors briefly take the upper hand. 
 

3. The markets should become more trend following than ever with most people relying on AI to think for them. Causing massive contrarian opportunities. 

73 Reds Grand Master

73 Reds

Posted
Posted
1 hour ago, gfp said:

The rebuttals are as dumb as the citrini piece.  The details in a hypothetical don't really matter.  The point is that AI being applied to everything it can be will be incredibly disruptive to the current order of things including employment and "the economy."  If you listened in school, capitalism is super depressing for every business eventually.

 

We will have abundance and an absolute shit show of unemployment and government welfare all at the same time.  It's gonna be rough.  Encourage your kids to end up on the right side of it.

 

@gfp The question is, what is the right side, and are there more than just two sides?  Fascinating time to be alive.  Where are you looking to allocate dollars in an AI world?  If anyone here remembers the cartoon "The Jetsons", AI evokes an image of that kind of existence.  For my $, I hope it is all of what optimists portend and then some.  Could be the main difference between us and possibly more advanced forms of life in a galaxy far away in the vast Universe is that they already developed and use AI.    

Spooky Mentor

Spooky

Posted
Posted
22 hours ago, Eldad said:

I’m probably completely wrong but I have been contemplating a big Ben Graham investment style comeback from AI. 
 

1. A lot of the monopoly powers we have seen building for 30+ years may get blown up. Returning most companies to the sort of 12% bond WB talks about. 
 

2. Capitalism may start to resemble warfare more. I counter you with this which causes you to counter me with this causing a more classic scenario where a company with outsized profits causes its own future problems and vice versa as competitors briefly take the upper hand. 
 

3. The markets should become more trend following than ever with most people relying on AI to think for them. Causing massive contrarian opportunities. 

 

This is an interesting idea. Pivot more to deep value / Ben Graham style investing rather than Munger style investing in wonderful companies. The key question always comes back to moats - who will have a sustainable competitive advantage in an AI world? In this AI world, will markets become more efficient?

 

One thing is for sure, us and the companies we invest in need to be adaptable, resilient / anti-fragile, and learn fast. 

Spooky Mentor

Spooky

Posted
Posted
8 minutes ago, MungerWunger said:

Response from Citadel ... https://www.citadelsecurities.com/news-and-insights/2026-global-intelligence-crisis/

 

Unrelated but Citadel pays 300k+ USD to new grads straight out of school 😆

 

Thanks for sharing. Loved this paragraph haha:

 

Despite the macroeconomic community struggling to forecast 2-month-forward payroll growth with any reliable accuracy, the forward path of labor destruction can apparently be inferred with significant certainty from a hypothetical scenario posted on Substack: The 2028 Global Intelligence Crisis.

whatstheofficerproblem Veteran

whatstheofficerproblem

Posted
Posted

I see Citrini and I instantly ignore. This guy pitches 200 stocks and then takes victory laps when two of them work out. My experience with him has not been palatable fwiw and some of the takes in his report are absolutely braindead. Should also note that this report was written by AI.

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