Automation goes from helper to replacement

The transition here is automation going from a thing that helps humans do their jobs better—improves productivity and efficiency—to being a way for companies to get to their ideal state of being able to do all the work themselves. This is colossal. This is economy changing. This really is the end of labor. There's labor and there's capital and these have always been in balance.

It gets disrupted because companies have always wished they could do all the work without employees. If you're a single founder and you don't have much work to do, you do all the work yourself, you get all the profits yourself. If your business is washing clothes and you buy a washing machine—before, you were doing it by hand in the river. You weren't making that much money. You saved up for a year and bought a washing machine.

Now you're able to do way more clothes and make way more money. If a whole bunch of people come to you and say, hey, I can also wash clothes in the river and you need to hire me because that's what's fair—you're going to be like, are you kidding me? I can do all this work myself. I literally am doing all the work myself. If I have a clothes washing business and I have 10 washing machines behind me, that is me doing all the work myself.

That is the transition that is happening. That is what AI is. The total amount of compensation that knowledge workers receive is somewhere around $50 trillion per year globally. I think it's somewhere around $10 trillion for the US. That is how much money companies are spending to pay humans.

And the major transition here is they don't want to be paying those humans. They actually never did. There are exceptions. If you're a small spunky founder and you want to work with your friends—you build a small startup, you're all kind of owners at that point. You'll still have elite employees, cadre, co-founders.

That's not going to go away.