The true cost of AI: think Thailand, not truck drivers

When the histories of our age are written, Donald Trump may be nothing more than a footnote for political scientists and sociologists (if not psychologists). Instead, our era may well come to be defined by our development of early artificial intelligence, and assessed on how we respond to that ultimate Pandora’s Box. The reason is simple: AI presents opportunities and challenges on a scale comparable only to the Industrial Revolution or the Agricultural Revolution. The progress of driverless cars or DeepMind’s Alpha Go are interesting stories in their own right, but discerning readers would be well-advised to focus on the bigger picture.

Consider, for instance, framing the question of artificial intelligence in the context of inter-country inequality. There are a variety of reasons why developing countries are likely to struggle rather than thrive as the AI Revolution gets properly underway. The first is the rapid erosion of the developing world’s traditional labour cost advantage. Notwithstanding just how low the cost of labour is in many developing countries, AI-powered robots and machinery are already at the tipping point of cost efficiency compared to human workers. As technology continues to improve, the sheer economics of AI will see a whole swathe of companies replace their factories and operations in the developing world with new AI-powered…