There are several fundamental issues that will be discussed in the next 10 years in the world in economic terms. One of these is electric vehicles and battery technology, the other is artificial intelligence, and the other is renewable energy, which is closely linked to these two. The most important features of both of these technologies are that they develop very quickly and that they come by disrupting the current order. The situation of traditional automotive companies, especially in Europe, is well-known. They lose markets to electric vehicles coming from China every year. However, the development rate of artificial intelligence is much faster than electric vehicles and its destructive effect is much greater.
There are also those who think that the impact of artificial intelligence is exaggerated. But there is also a large group of people who are completely against this. Frankly, I think that those who underestimate the issue of artificial intelligence either do not look at this issue closely enough or have difficulty changing their current mindset. A similar situation was experienced between Bitcoin and Krugman in the past.
One of the most important effects of artificial intelligence transforming the economy will be on the employment market. A significant portion of existing jobs may disappear in a very short time. The critical concept here is “very short time”. The artificial intelligence revolution is likened to the Fordist mass production revolution at the beginning of the 20th century. The technology that replaced blue-collar workers at that time, now targets white-collar workers. Even now, Chatgpt can provide much more consistent answers than many experts.
Why do I care about the very short period of time? Because the previous major transformations were adopted by the whole world within a period of at least 20-30 years. Therefore, countries, sectors, people somehow adapted to the new situation during this long period. Each technological revolution created its own labor force needs, the type of work changed, but people were somehow employed in the new world. Currently, the development speed of artificial intelligence is much higher than the previous period, so there is not enough time for adaptation. In addition, it is a more likely candidate to directly replace human power in many areas than the old technological changes.
Another important issue is the concentration of power in certain hands in this new world. We will hear much more about the concept defined as techno-feudalism, which emphasizes the undisputed dominance of large technology companies in the world, from now on. This will not only lead to a widening gap between companies but also between countries. Because there have been two major developments that have made the subject we call artificial intelligence so prominent recently. One is the production and collection of very large amounts of data, and the other is the production of the infrastructure-technology that can process this data. There are only a handful of companies in the world that both collect this data and produce this infrastructure. Due to the very high investments, many natural monopolies have been created. This will be one of the most important issues of the coming period. For example, the dominant company that designs chips produced for artificial intelligence is NVIDIA, the company that manufactures them is TSMC, and the company that manufactures the machine produced for this production is ASML. There is no company that has been able to compete strongly with these companies.
On the other hand, the ownership of the raw materials required for the production of these chips is another major issue. Here, we see that China is dominant. It is useful to read the major international clashes of the coming period in this area. It is no coincidence that Trump attaches such importance to Ukraine's rare earth elements. TSMC, one of the companies I mentioned above, is a Taiwanese company. We can also read here the occasional flare-up of the China-US conflict over Taiwan.
