AI Agents: Disrupting Our Economy
AI technology is advancing fast. Tools like Anthropic’s Claude Code and OpenAI’s Codex are impressing users with their capabilities. These AI agents are changing the way businesses operate, making it easier and cheaper to handle in-house tasks like managing databases and workflows.
This shift threatens software-as-a-service companies such as Monday.com and Asana. Businesses now have a more affordable way to manage tasks, forcing larger companies like Oracle to reduce prices significantly.
Imagine every consumer using their own AI agent for everyday transactions. This could push aside middlemen like travel agencies or estate agents, who typically earn from facilitating these processes. Instead, people might code their own solutions for things like food delivery, making services like DoorDash and Uber less viable. Rather than relying on brands like Visa and Mastercard, AI agents might prefer cryptocurrency, which usually has lower transaction costs.
These predictions have already started affecting stock prices. Recently, shares of companies like Uber and DoorDash have dropped in response to these emerging trends.
The Threat of Job Losses
The picture isn’t rosy for workers. Traditionally, new technologies created job opportunities as they phased out old roles. However, AI is evolving to take over jobs that humans typically manage. According to experts, workers displaced by AI won’t find it easy to transition to roles that focus on managing AI itself.
Many could find themselves in gig economy jobs, like driving for Uber, which often offer unstable incomes. This instability can hurt overall consumer spending, pushing companies toward further reliance on AI, continuing a cycle of layoffs. In fact, the top 10% of U.S. workers contribute to half of all consumer spending. If they are laid off, the repercussions could be significant, straining the economy.
Wider Economic Impacts
This trend could have even broader implications. A wave of layoffs within software companies might lead to defaults on private loans. Private credit firms often lend to software companies based on their anticipated future revenue. When that revenue fails to materialize because of AI disruptions, it could lead to massive defaults, creating a crisis that extends beyond just the tech sector.
As economic confidence dwindles, the housing market might also experience a dip. Many of these laid-off workers who relied on stable incomes may struggle to meet their mortgage payments.
A Cycle of Decline
These factors contribute to a negative feedback loop. Companies lay off workers, which weakens demand but pushes them to invest more in AI. This creates further layoffs, which further weakens consumer spending.
Historically, such market downturns can have a cascading effect on consumer confidence, leading to more job losses. Unfortunately, traditional financial tools may not resolve these issues since the root problem is the shift to AI technologies.
A New Economic Landscape?
Experts warn that the economy could face an unprecedented challenge where the most productive technologies lead to fewer jobs. Amid rising wealth for large AI companies, many individuals may struggle. This phenomenon has been termed “ghost GDP,” where economic figures look strong, but the benefits aren’t felt in everyday life.
Citrini’s thoughts on this issue highlight the urgent need for new frameworks to understand our changing economy. Whether those frameworks emerge in time to respond to these challenges remains a pressing question.
With AI shaking up the job market and traditional business models, observers are closely watching how society will adapt.
