GoKawiilA hypothesis on the not-so-distant future of software, books, music, and movies, in which most of what we consume gets cheaper, more abundant, and noticeably worse, while the human-made variant moves into a luxury segment of its own.
Disclaimer: This is an opinion piece and most of it is speculation about a future that has not arrived (yet?), based on a few data points that have. As usual, summary at the end.
A few years ago I would have laughed at anyone telling me that there is a serious market for ten-dollar drills, two-dollar dresses, and one-dollar pairs of shoes shipped from a warehouse on the other side of the planet. Today, however, that market exists and it has a name, and it is even publicly traded (sort of, through holdings). TEMU, Shein and a few others have built frankly mind-boggling businesses around the idea that if you make production cheap enough, fast enough, and just barely good enough to look right on a phone screen, an enormous part of the population will buy it, even when the product breaks within a week, when the materials it is made of contain worrying levels of toxic substances, and when the carbon footprint of one delivery exceeds that of an equivalent local purchase by orders of magnitude.
The key to this sort of business model is not innovation, but instead the externalization and compression of cost. Somewhere upstream, people work seventy-five hours a week, in conditions most readers of this website would refuse to even visit, so that the rest of us can have a cheap plastic spatula at our doorstep within five business days. While the visible price collapses, the invisible costs get distributed onto landfills, lungs, and ultimately people that we will never meet.
What follows is a hypothesis I cannot prove but have been turning over in my head for a while, as we are watching the same thing happen to software, books, music, (film-)scripts, and most of the digital goods and services we consume. The cheap labor in this case is not human, it is a Large Language Model (LLM), or what many people these days call “AI”, and the externalized cost is, among other things, quality, which requires craftsmanship to produce, and attention to perceive. And just like with physical goods, we will probably end up with a two-tier market, in which we have a large and massively profitable lower tier of generated slop, and a smaller, more expensive upper tier of work that is still recognizably human.
I’d like to call this the TEMU-fication of software, digital goods and services, and describe what it might look like.
Cheap labor
For decades, the global fashion industry has relied on a workforce that has almost no leverage and no voice, and for which the economics work because someone, somewhere far away, will sew a t-shirt for less than the price of a coffee. Without that skewed arrangement, the entire fast fashion business model collapses. The garment in your hand is only cheap to you because it has been expensive to someone else, in ways that the price tag does not show.
Modern Large Language Models occupy a similar position in the economy, with one important difference, which is that there is no human being in the sweatshop, only a stack of GPUs trained on a corpus of work that other human beings produced over the course of decades. The labor that has been compressed is historical and the model is a kind of compressed copy of the work of millions of programmers, writers, illustrators, and musicians, served back at near-zero marginal cost. Well, at least in theory, and only if the hyperscalers find a way to lower the cost per token, but that’s a different topic.
However, the result is the same. A class of goods can suddenly be produced for an order of magnitude less than before. And, just like with TEMU, those goods turn out to be just barely good enough.
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