Will the AI economy create a permanent underclass?

T he San Francisco Bay Area is in the midst of an AI frenzy that makes the California gold rush of the mid-19th century look like a scavenger hunt. Top programmers and developers are being offered compensation packages worth hundreds of millions of dollars to switch firms, while young engineers lucky enough to have joined leading AI startups early are contemplating retirement before age 35. Driving up the Bayshore Freeway from San Francisco International airport into the city, you pass hyper-specific billboards advertising obscure AI applications seemingly aimed at absurdly niche audiences. How can that possibly be profitable? The answer is that in a city crawling with startups, getting the right software product in front of a founder whose company could soon be worth billions of dollars is far more lucrative than using billboard space to sell burgers or laundry detergent. Yet beneath the frenzy lies a palpable anxiety, as members of this young super-elite fear that their startups may not be the ones to win the AI sweepstakes. Failure, in their eyes, means being left behind while AI automates large swaths of white-collar work – especially coding jobs, which until now have been a veritable licence to print money – and falling into the ranks of the permanent poor. Though economists still debate whether AI will destroy jobs or create them, the prevailing mood in Silicon Valley is far more pessimistic. …