I have been thinking about what happens when the AI models get good enough that the people running them do not need you anymore. Every time they train a new frontier model they do a calculation about the most efficient way to make money off it and for a while the answer has been selling access like a SaaS subscription where you buy access to the model and you use it to make money and some percent of what you make pays the API bill and in a growth economy this works because the economy grows and they do not need to increase their share since they just get more because the whole pie is getting bigger. But we are not in a growth economy anymore because the primary driver of economic growth has been onboarding new users and we do not have enough new users anymore and without global growth the only way for the big tech companies to grow is to take a bigger share first from their users and then from their business partners and then from their employees and they start eating themselves.

This hits differently in India because we have always been on the consumption side of this equation and we do not have our own frontier models and we do not have our own hyperscalers and we do not control the compute and sixty percent of global compute is owned by five US companies and the rest of us are just renting access. I think about the IT services industry in India and how TCS and Infosys and Wipro built their entire business on labor arbitrage where they took advantage of the fact that Indian engineers cost less than American ones and now the AI model makers are going to do the same thing to them because why pay an Indian engineer when you can pay an API call and the model makers will not stop at IT services because they will come for every industry starting with the application layer which will be the first place they target in their hunt for verticality.

The quality of a model scales pretty clearly with the amount spent on the training run and it costs a lot and very few can afford to be on the frontier and they want to recoup their investment so they will not provide unfettered API access and instead we will see an era of market segmentation way beyond personal and business and it will be per industry with one price for finance and one price for healthcare and one price for copywriting and rolled out to preferred partners first and you pay to be early and you pay so others do not get it and the frontier labs uncoordinatedly coordinate to calculate the maximum they can siphon off. Think about what value you think you add and why your employer sees it worth it to give you some of the profits and it is probably not your muscle power because the core limiting factor of most industries is intelligence and if the model is smarter than you then why are you still in the loop at all.

I think about the Swiggy delivery partner riding through Bangalore traffic in the afternoon heat and the Zomato guy who knows my regular order and the Uber driver who has been driving for twelve hours and I wonder what happens to them when the model does not need them to validate the orders or navigate the streets because the robotaxi is here and the drone delivery is here and they are cheaper and they never get tired. I think about the call center worker in Gurgaon taking complaints from Americans about their cable bills and the BPO employee in Hyderabad processing insurance claims and the freelance designer on Fiverr from Jaipur who undercuts everyone and I wonder how long before the API call replaces all of them and what they do with their time when the economy does not need their labor anymore. This is like your body consuming its muscle to stay alive and pretty soon after that you die because we live in a society and we work for each other and after AI takes all the jobs that paid the people to buy the stuff that those jobs produced then why drive a truck full of stuff to a place where nobody has money to buy it.

The markets are thinking on an extremely short time horizon and they do not see this coming but the demoralization is just beginning and there is a way out of this but the world is not ready for it yet because way too much zero sum thinking still dominates and someday we will realize that the universe is putty in our hands and it never had to be like this but that day will not be today or tomorrow and until then the only thing you can do is figure out how to not be in the part of the economy that gets cut first.

If this made you think differently do find me on Twitter. I am @troysk704.