Someone Still Has to Buy Your Product

The writer argues that rapid AI improvements are collapsing the cost and time required for many tasks - measured by METR’s exponentially growing task-completion horizon, now covering jobs that once took humans 16+ hours - so functions like video editing, website design, and language porting can be produced far cheaper and faster. When competitors can undercut established firms by 10-20x rather than 10-20%, existing business models break: payroll, rent, and debt are fixed costs that can’t be instantly erased, and many freelancers and small creative/service firms will suddenly lose customers to AI-first offerings.

That revenue loss ripples through the economy because one company’s spending becomes someone else’s income; layoffs and cancelled contracts reduce consumption for groceries, rent, and local services, amplifying decline. While a new equilibrium will eventually emerge - cheaper services enabling new businesses and uses of money - the transition will kill many firms before that happens. The central warning is practical: celebrating internal cost savings overlooks who loses income on the other side, and markets still require real buyers for products and services even as AI slashes production costs.