At this point, the market is pricing in all the positive impacts of AI and robotics and trying to find winners. The next conversation will be the losers.

• Nvidia is the most valuable company in the world
• Elon Musk said, “Robot taxis make Tesla a $5 trillion company… Optimus Robot, I think, makes Tesla a $25 trillion company.”
• Microsoft is spending $80 billion on data centers only this year
• Robot companies have turned into meme stocks

The multiples of all tech stocks are high on the expectation that they will generate incredible margins due to automation, AI and robotics. I agree completely, but those margins will have to come from somewhere the obvious culprit is human labor.

Now Elon Musk talks a lot of nonsense, but he talked about 10 billion humanoid robots by 2040, which is more than the entire population of the planet. Jensen Huang also talked this week about how close we are to a ‘ChatGPT’ moment for robotics, which I think is certain given that generative AI is allowing them to see and interact with the world like never before.

The knee-jerk reaction will be the old Industrial Revolution trope about Luddites and people finding different jobs. Maybe it will, but even a short period of +8% unemployment in the US would be incredibly disruptive and I expect it to be a lot higher than that.

“I’m not afraid of it at all,” Sam Altman said of losing his job. “Actually, I think it’s good. I think it’s a way to progress and we’re going to find new and better jobs.”

OK, Sam, what jobs could those be?

To put Musk’s market cap comment into perspective, the entire market cap of the S&P 500 is currently $52 trillion. To get to half of that, profits would have to come from somewhere – other companies or people’s pocketbooks. If people don’t have jobs, where do they get the money?

Now I don’t have the answers to these questions – although I do have some ideas – what bothers me is that hardly anyone even talks about it with any rationality or honesty.