You need to be a founder to meaningfully benefit from this attitude. Everyone else is accountable on a short-term timeframe to someone who can pull the plug at any time and who determines their level of compensation, all the way down to potentially zero.
The risk aversion isn't driven by business needs, but by the needs of the employees and unless you are a founder with a majority of voting shares, you are an employee. Some of the more risk tolerant people might do it for their sliver of equity, but many will not.
For example, one of my jobs (I am overemployed) is as a dev for a small startup that first tried to outsource development and then had to hire devs in house as that was a disaster. We have a certain amount of runway. Project is pretty chaotic. Customers are bailing as we cannot meet our commitments.
I would argue rational management would push hard to fix things quickly and spend the money to do so even if it meant raising money sooner, as key customers are fleeing, our reputation is mediocre, and stability is nowhere close. As an employee, I am fighting hard for a controlled flight into the ground to drag out how long the paychecks for this mess keep flowing.
Why?
As an employee, I have no meaningful upside unless my options suddenly get valuable and I long ago learned that you can be laid off with limited recourse, so I value equity at zero. My interests are entirely in prolonging my employment so the cash keeps flowing.
I will take the 100% certain death of my employer over 3 years rather than a 50/50 chance of success as a business.
Same thing with managers and AI. Better to take the certain win as if you are an employee, it isn't as though you definitely gain from the company gaining.
Totally agree with your points. I would like to add one more:
Even startups are beholden to the VCs that funded them. Unless the founder is a multi-millionaire and willing to risk it all, risk aversion will become a factor.
> So the question shouldn’t be, "How many people can we replace with AI?
Replacing human labor with machine labor is essentially what automation is. Look what happened to telephone operators and bank tellers on one end (replaced by machines like automated switching systems and ATMs) and clerical workers and cashiers on another (replaced by tools like office software and self-checkout systems.)
The sales pitch to businesses is, and continues to be, saving money by replacing paid humans with unpaid machines.
I don't think that AI changes the fundamental trajectory of automation, or its tendency (over the past few decades at least) to widen income disparity as displaced workers move to lower-paying service jobs that aren't yet automated, but it may have much wider impact than previous automation waves.
This premise is how AI is sold by the AI companies. It is the software-level equivalent of perfect cheap obidient slave (employee) for the master (employer).
I really wonder how all this AI stuff feels/seems to a management person who is not a programmer/low-level-minded person. I remember the time when large portion of average workers could barely understand how to "use computer", let alone the wonder of some simple Excel-VBA/Python magic, and as of now, humanlike magical text prompts. Now after decade(s), some of these persons are in a management position dealing with "AI".
>>It’s frustrating to see how most companies view AI almost exclusively as a tool to cut costs, mainly by replacing workers, rather than as an opportunity to scale up, take bigger risks, and pursue more ambitious, world-changing projects.
Having machines do the goods and services production while humans are free to pursue whatever they wish (with a basic income of-course) IS world changing.
The goal of an established business is to avoid checkmate and draw their operations out as much as possible. They can’t lose limited units.
Newcomers/startups goal is to checkmate the establishment. They don’t care if they have to lose some units as long as they make progression since they’re starting with a full set.
So, expecting established businesses to do something novel is a hopeless endeavor.
AI doesn't change the actual business process/model that much in most instances. So you end up with just automation of the existing experiences with minor adjustments.
You need to be a founder to meaningfully benefit from this attitude. Everyone else is accountable on a short-term timeframe to someone who can pull the plug at any time and who determines their level of compensation, all the way down to potentially zero.
The risk aversion isn't driven by business needs, but by the needs of the employees and unless you are a founder with a majority of voting shares, you are an employee. Some of the more risk tolerant people might do it for their sliver of equity, but many will not.
For example, one of my jobs (I am overemployed) is as a dev for a small startup that first tried to outsource development and then had to hire devs in house as that was a disaster. We have a certain amount of runway. Project is pretty chaotic. Customers are bailing as we cannot meet our commitments.
I would argue rational management would push hard to fix things quickly and spend the money to do so even if it meant raising money sooner, as key customers are fleeing, our reputation is mediocre, and stability is nowhere close. As an employee, I am fighting hard for a controlled flight into the ground to drag out how long the paychecks for this mess keep flowing.
Why?
As an employee, I have no meaningful upside unless my options suddenly get valuable and I long ago learned that you can be laid off with limited recourse, so I value equity at zero. My interests are entirely in prolonging my employment so the cash keeps flowing.
I will take the 100% certain death of my employer over 3 years rather than a 50/50 chance of success as a business.
Same thing with managers and AI. Better to take the certain win as if you are an employee, it isn't as though you definitely gain from the company gaining.
Totally agree with your points. I would like to add one more:
Even startups are beholden to the VCs that funded them. Unless the founder is a multi-millionaire and willing to risk it all, risk aversion will become a factor.
> So the question shouldn’t be, "How many people can we replace with AI?
Replacing human labor with machine labor is essentially what automation is. Look what happened to telephone operators and bank tellers on one end (replaced by machines like automated switching systems and ATMs) and clerical workers and cashiers on another (replaced by tools like office software and self-checkout systems.)
The sales pitch to businesses is, and continues to be, saving money by replacing paid humans with unpaid machines.
I don't think that AI changes the fundamental trajectory of automation, or its tendency (over the past few decades at least) to widen income disparity as displaced workers move to lower-paying service jobs that aren't yet automated, but it may have much wider impact than previous automation waves.
This premise is how AI is sold by the AI companies. It is the software-level equivalent of perfect cheap obidient slave (employee) for the master (employer).
I really wonder how all this AI stuff feels/seems to a management person who is not a programmer/low-level-minded person. I remember the time when large portion of average workers could barely understand how to "use computer", let alone the wonder of some simple Excel-VBA/Python magic, and as of now, humanlike magical text prompts. Now after decade(s), some of these persons are in a management position dealing with "AI".
>>It’s frustrating to see how most companies view AI almost exclusively as a tool to cut costs, mainly by replacing workers, rather than as an opportunity to scale up, take bigger risks, and pursue more ambitious, world-changing projects.
Having machines do the goods and services production while humans are free to pursue whatever they wish (with a basic income of-course) IS world changing.
where would the income come from? are you talking about UBI?
Yes we will need that once automation across the economy crosses a certain percentage.
It’s like chess in some ways.
The goal of an established business is to avoid checkmate and draw their operations out as much as possible. They can’t lose limited units.
Newcomers/startups goal is to checkmate the establishment. They don’t care if they have to lose some units as long as they make progression since they’re starting with a full set.
So, expecting established businesses to do something novel is a hopeless endeavor.
It's easier to destroy teams than to build anything profitable.
AI doesn't change the actual business process/model that much in most instances. So you end up with just automation of the existing experiences with minor adjustments.