Sunday, August 31, 2025

David Ricardo was Probably Right About Automation, Hence Right about AI

David Ricardo is an economist whose views on automation and substitution of machinery for human labor are relevant for discussions of the impact of artificial intelligence on jobs. Basically, Ricardo came to the conclusion that substituting machinery for human labor was not good for workers. Lots of workers who never study economics could figure that out for themselves. 


With regard to the impact of AI, we might find lots of cognitive workers pondering the impact as well. 


In principle, automation can increase wages, but only when accompanied by new tasks that raise the marginal productivity of labor, and when workers in the affected industries and roles are able to gain a share of productivity growth (profit sharing or some other mechanism). 


There are some early signs that what AI might be doing, in some areas such as customer service and software development, is eliminating some number of entry-level jobs


source: Stanford University Digital Economy Lab


Friday, August 29, 2025

Is Code the Enterprise AI Killer App?

Is code generation the first “killer app” for language models or mostly the killer app for enterprise users? 


Since 2024, one might argue, model spending on language model application programming interfaces has more than doubled. Where model development might have driven spending in prior years, inference now seems to be driving growth. 

source: Menlo Ventures 


According to Menlo Ventures, Anthropic has surged to the lead in enterprise market share, while OpenAI has lost share. Google’s Gemini growth rate also parallels that of Anthropic. 

source: Menlo Ventures 


And there seems ample reason to believe that, at least in the enterprise portion of the market, the drive to gain share fast, and invest heavily in upgraded models, has a clear customer logic. Enterprise customers do not tend to switch model suppliers once they have made a decision. But they also will upgrade based on access to better performance.


The former preference encourages the importance of gaining share fast, as once an enterprise commits to a particular platform, it will tend to stay. The latter preference explains the intense effort to produce more-capable model versions, as that drives model upgrade or switching behavior on any platform. 


So performance clearly matters for retention, not simply customer acquisition. 

source: Menlo Ventures 


So where an order of magnitude price drop might convince many consumers to use an “older” model, enterprise users tend to behave differently, preferring to buy the latest and most-capable model. 


source: Menlo Ventures 


Consumer trends are different, of course. Most consumers use the free versions of models. That has meant the monetization model is converting users of the unpaid versions to model subscriptions. But Menlo Ventures does not believe that will be the dominant form of monetization in the future, anymore than subscriptions have been the driver for search, social media or e-commerce. 


source: Menlo Ventures 


“The biggest long-term monetization opportunities won’t be subscriptions,” a Menlo Ventures report argues. “We expect rapid adoption of advertising models, transaction fees, affiliate revenue, and marketplace models.”


In the near term, others might say subscriptions are going to remain the leading direct monetization model. 


Stage

Dominant Monetization Models

Example Contexts

Today (2024–2025)

Subscription, API billing, in-app upgrades

ChatGPT, Copilot

Near-term (2025–2026)

Affiliate links, transactional agents, SaaS hybrid

AI travel planners, creative tools

Mid-term (2026–2028)

Task-based pricing, agent commissions, smart bundling

AI exec assistants, recruiting agents

Long-term (2028–2030)

Ubiquitous embedded AI, conversational ads, OEM/device-based

Voice wearables, car copilots, ambient AI


Of course, different models are going to make more sense than others, depending on the use case. What makes sense for an autonomous or embodied deployment will not make as much sense for transaction use cases or content consumption. 


Monetization Model

Consumer Trust

Scalability

Fit for Autonomous AI

Subscription

High

High

High

Transaction/Outcome Pricing

Medium–High

Medium

Very High

Affiliate/Referral

Medium

High

High

Conversational Ads

Low–Medium

Very High

High

In-app AI Features

High

High

Medium

Embedded in Devices/OS

High

Very High

High

Data-for-Access Models

Low

High

Medium


"Data Sovereignty" Might be an Illusion

As a practical matter, data sovereignty, the idea that data is subject to the laws and governance structures “only” or “exclusively” within the nation where it is collected or stored, is probably more accurately described as “data residency” in some cases and in some cases not sovereignty at all. 


Governments can lawfully obtain some data, when prosecuting major crimes, for example. And how often does any bit of data reside “exclusively” within any one political jurisdiction, in any case? 


While a country may assert that data stored within its borders is governed by its laws, in reality, data often resides in cloud infrastructure spanning multiple jurisdictions. can be subject to both General Data Protection Regulation and U.S. subpoenas under the CLOUD Act.


Mutual Legal Assistance Treaties (MLATs) and bilateral frameworks such as the U.S. CLOUD Act allow law enforcement access to data stored in other jurisdictions when investigating serious crimes.


These mechanisms sidestep national data sovereignty, creating pragmatic paths for lawful access, even if the data physically resides in a foreign jurisdiction.


If a local data center is operated by a foreign company (AWS, Google Cloud, Azure), that company may still be compelled to produce data under its home country’s laws.


So data residency becomes more symbolic than anything else, a bit of posturing, even if, under most circumstances, most data will not be subject to unusual or extraordinary access. In cases involving terrorism, money laundering, cybercrime, or child exploitation, governments often claim national security imperatives that justify sidestepping normal sovereignty considerations, and many observers might agree such practices are defensible. 


So while “sovereignty” might still hold, in practice, for most data, the protections are not absolute. 


Concept

Ideal Definition

Real-World Practice (Serious Crimes)

Data Sovereignty

Data is governed exclusively by local laws

Subject to foreign laws if provider is foreign or Mutual Legal Assistance Treaties apply


Data Residency

Data stored within borders to ensure sovereignty

Storage local; control possibly foreign 

No Sovereignty

State borders don't block data access

True for intelligence ops, cybercrimes, cross-border subpoenas

Legal Access Channels

Governments access data via their own legal systems

MLATs, CLOUD Act, intelligence-sharing bypass local laws

Thursday, August 28, 2025

Head Turner

 
I’m sure psychologists will have explanations for why this flight attendant turns heads (men and women, both).  I don’t think it’s just the uniform, the figure or the flight attendant mystique. Height, perhaps. Poise, certainly. I think it’s the runway model vibe.

Wednesday, August 27, 2025

AI Will Displace Some Content Creator Jobs, Reshape the Rest, Create New Roles

It seems almost pointless to argue about the impact artificial intelligence is going to have on content creators, for the simple reason that AI is going to have a wide range of effects, including displacing some human jobs; augmenting human labor and reshaping content creator functions, as well as creating wholly-new functions and jobs. 


Most likely, “all of the above” are likely outcomes, as has been the case with other new technologies applied to content creation. 


Technology

Displaced Roles

Augmented Roles

Reshaped Roles

Created New Roles

Printing Press (15th century)

Hand-copying scribes and illuminators, who manually reproduced manuscripts

Authors and scholars, by enabling mass distribution of their works to wider audiences

Writers shifted focus from rare, elite manuscripts to broader, accessible literature; encouraged standardization of texts

Printers, publishers, bookbinders, and editors to manage production and distribution

Photography (19th century)

Portrait artists and miniaturists, whose realistic depictions were largely supplanted by photos

Painters and illustrators, who used photographs as references for more accurate or complex compositions

Artists moved toward impressionism, abstraction, and conceptual art, emphasizing emotion over literal replication

Photographers, darkroom technicians, photo retouchers, and later film directors

Phonograph and Audio Recording (late 19th-20th century)

Some live performers in theaters or salons, as recordings reduced demand for repeated live shows

Musicians and composers, by allowing preservation and global sharing of performances

Performers adapted to studio techniques, focusing on perfect takes rather than live endurance

Sound engineers, music producers, record label executives, and radio DJs

Typewriter (late 19th century)

Professional hand-writers or copyists for official documents

Journalists and authors, with faster drafting and easier revisions

Writing became more iterative and professionalized, with emphasis on typing speed and clarity

Typists, secretaries, and stenographers specialized in machine operation

Word Processors and Computers (late 20th century)

Dedicated typists and manual typesetters in publishing

Writers and editors, through tools for easy editing, spell-checking, and formatting

Content creation became digital and collaborative, with focus on multimedia integration

Desktop publishers, web designers, software documentation specialists, and digital archivists

Internet and Digital Platforms (late 20th-21st century)

Traditional print journalists and classified ad writers, as online formats reduced print demand

Bloggers and independent creators, by providing free or low-cost global publishing tools

Creators emphasized interactive, real-time content like social media posts over static articles

Social media influencers, SEO content strategists, podcasters, and user-generated content moderators


And all that will happen irrespective of today’s efforts to “protect” human jobs. 


Netflix, for example, has guidelines for use of generative AI based on five main points:

  • The outputs do not replicate or substantially recreate identifiable characteristics of unowned or copyrighted material, or infringe any copyright-protected works (respect for copyright)


  • The generative tools used do not store, reuse or train on production data inputs or outputs (data security)


  • Where possible, generative tools are used in an enterprise-secured environment to safeguard inputs 


  • Generated material is temporary and not part of the final deliverables


  • GenAI is not used to replace or generate new talent performances or union-covered work without consent.


The guidelines also caution against creating content that could be mistaken for real events, people, or statements. 


Of course, as a practical matter, all that will have to be monitored and verified. Perhaps the areas of greatest concern are final character designs and key visuals; talent replication and use of unowned training data. 


Proposed Use Case

Action 

Rationale

Using GenAI for ideation only (moodboards, reference images)

Low risk, non-final, likely not needing escalation if guiding principles are followed.

Using GenAI to generate background elements (e.g., signage, posters) that appear on camera

:warning:

Use judgment: Incidental elements may be low risk, but if story-relevant, please escalate. 

Using GenAI to create final character designs or key visuals

:octagonal_sign: 

Requires escalation as it could impact legal rights, audience perception, or union roles.

Using GenAI for talent replication (re-ageing, or synthetic voices)

:octagonal_sign:

Requires escalation for consent and legal review. 

Using unowned  training data (e.g., celebrity faces, copyrighted art)

:octagonal_sign:

Needs escalation due to copyright and other rights risk.

Using Netflix's proprietary material

                          :warning:

Needs escalation for review if outside secure enterprise tools.


Some observers might liken the use of generative AI to the use of computer-generated graphics. It might be argued that CGI did not broadly automate creative work, as AI might threaten to do, in some cases. 


While CGI technology does automate certain repetitive or technical tasks, the work typically requires direct human input, creative intent, and iterative collaboration, some would argue. And while CGI shifted some jobs from traditional effects (such as practical props) to digital, it did not broadly automate creative work. 


AI, on the other hand, arguably can drastically reduce the need for human artists, writers, and designers, especially for routine or template-based tasks. A reasonable view held by creatives is that generative AI creates extensive automation threats to creative jobs, challenging the role, compensation, and rights of human creators in ways CGI never did. 


Issue

CGI

Generative AI

Labor Replacement

Redistributes labor, limited direct job loss

Automates substantial creative tasks, risks widespread job loss

Human Creativity

Essential for most tasks

Can fully automate or diminish creative input

New Job Creation

Created new specialist roles

Some new roles, but net job losses expected

Worker Rights/Ethics

Tied to work conditions, overtime

Issues of data exploitation, loss of control, IP and consent

Value Perception

Value linked to expertise and collaboration

Value eroded by commoditization, especially for freelancers

Legal Uncertainty

Relatively mature standards

Significant legal and ethical ambiguity


Content workers may not like it, but AI is going to reshape human roles and human jobs. New technology always has done so.


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