Tech Tycoons have Got the Economics of AI Wrong

Even as financial growth was just removing, some financial experts were currently cynical. Coal, wrote William Stanley Jevons in 1865, is “the mainspring of modern product civilisation”. Yet it was limited and would soon go out. Although more might be found by deeper, it would be progressively pricey to extract and these higher costs would minimize the competitiveness of Britain’s producers. After all, in other countries the black fuel was still in sight of daylight. Efficiency gains-using less coal to produce the same quantity of stuff-would not save the nation. Indeed, cleverer use of limited resources would just provide a reward to burn even more coal, which would, paradoxically, result in an even quicker usage of British reserves. There was no escape, the Victorian economist believed. Coal would be exhausted and the country was likely to “contract to her previous littleness”.

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This short article appeared in the Finance & economics area of the print edition under the heading “Rocked by DeepSeek”

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Tech tycoons have got the economics of AI wrong

From the February 1st 2025 edition

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