The Case for Saving for the Age of AGI

AI is rapidly emerging as the most transformative innovation in human history, with exponential progress that could soon transform the world as we know it.

We have long aligned ourselves with the techno-optimist camp, as discussed in several of our posts, including Technology and Labor.

However, many loud voices in Silicon Valley are now warning of a potential “AGI economic freeze”. So, let’s unpack the core arguments from their side:

* Shifting assumptions: If machines can do more “work” than humans, our assumptions about labor, productivity, wages, and value may no longer hold.

* Mass displacement: AGI is poised to automate entire sectors (including knowledge and white-collar tasks), leaving human labor underused or redundant.

* Near-zero costs: AGI scales cheaply, collapsing traditional margins and business models.

* Falling demand: As wages drop, people have less to spend, shrinking aggregate demand even as production soars.

* Wealth concentration: AGI becomes the new capital, enriching a narrow tech elite and deepening inequality.

* Innovation squeeze: Human-led entrepreneurship declines as AGI claims the easiest value-creation opportunities.

* New social contract: Redistribution (e.g. AGI dividends, UBI) will be required to keep society functioning.

* Human purpose: Beyond economics, work, dignity, and agency will be shattered in an AGI-dominated world.

Conclusion

There is no doubt that AI is scary and that it will upend how the economy works. Many existing job roles will be automated, entire sectors may be disrupted, and AI adoption is likely to follow a non-linear and uneven path. Some in the next generation may even end up “merging with machines”.

Still, free markets have always adapted and naturally evolved.

Yet, if your base case assumes a future with less liberty, make sure to build as much wealth as possible under the current pre-AGI regime.