GoKawiilYou’re probably familiar with the dead internet theory: most of what you encounter online is now generated by bots, for bots, with humans reduced to a shrinking audience for machine-generated noise. Last year, over half of new content on the internet was AI-generated. The humans are still there, scrolling, but the thing they’re scrolling through has become a performance staged by machines for an audience that hasn’t yet realized the show isn’t for them.
It’s utterly desiccating to log onto spaces seeking a live mind to joust and think with, and find a relentless stream of slop. Promised an age of superconnectivity, we’ve let our shared physical spaces wither, only to find our promised digital commons to be one large billboard increasingly read and created by bots.
That’s bad enough. I want to talk about something worse. Call it the dead economy theory.
The AI industry has a numbers problem.
OpenAI, Anthropic, Google DeepMind, Meta AI, Microsoft: the combined investment in large-scale AI infrastructure now runs into the hundreds of billions of dollars, with projections into the trillions over the next decade. OpenAI alone has been valued at north of $800 billion. Anthropic, which has yet to produce a single year of profit, commands a valuation in the same stratosphere. These numbers need an addressable market large enough to justify them.
There is only one market that large: the global labor market.
As we’re getting excited about discovering how to use claude.md files in Cowork, the industry is pitching a different reality. Every investor presentation of an AI agent “doing the work of ten analysts” is telling you the same thing: the product is labor replacement. The gentler language (”copilot,” “assistant,” “augmentation”) is marketing. The financial model underneath requires the elimination of human cost centers at civilizational scale. If it doesn’t do that, these companies are the most overvalued assets in the history of capitalism. The people writing the checks are not in the habit of lighting trillions of dollars on fire for a better autocomplete and an endless proliferation of longer and longer memos that nobody reads.
The AI companies now construct their own benchmarks to prove the point. OpenAI’s GDPVal benchmark measures how well models perform across forty-four occupations, from real estate broker to news analyst. The AI Productivity Index evaluates models against four specific professional roles: investment banking associate, management consultant, Big Law associate, primary care physician. These are targeting reticles aimed at the professional class. As an OpenAI evaluation lead told the New York Times, models now achieve “over an 80 percent win rate compared to human professionals” on tasks that, months earlier, no model could match. A former banker on the research team “keeps being shocked by how much of her old work the models can do.”
So let’s take them at their word. Assume the technology works as advertised, that AI systems become capable of performing most cognitive labor at a fraction of the cost of human workers. What happens next?
Follow the money through three turns.
... continue reading