Artificial intelligence

Artificial intelligence

It's the folks who are entering the job market for the first time that are bearing the brunt of that, and to me, that's in a very standard, classic textbook way, exactly the type of unemployment that the Central Bank is equipped to help accommodate with looser monetary policy.

Companies aren't rewarded for making decisions that support people or social goods. Companies are rewarded for profit. They're rewarded for being first to market. When robotics cuts labor costs or increases output, deployment becomes a business decision. Whether displaced workers are retrained or supported elsewhere depends on public policy.

Our measure, 'observed exposure,' compares the tasks LLMs are theoretically capable of to the tasks people actually use Claude for at work. We find that actual usage is far from reaching theoretical capability.

Either way, I think the AI boom is alive and well, but with much of the short-term hype fading away, the big question is whether the long-term trajectory is still there and whether it makes sense for investors to hit the buy button now that the near-term is somewhat less hyped while the long-term is as exciting as ever.

Google stock has surged 75% over the past twelve months, a performance that comfortably outpaces many of its large-cap technology peers. However, this price appreciation has shifted the narrative from "deep value" to a high-stakes "execution play." While Google's P/E ratio of 27.8 remains competitive compared to the loftier multiples of the "Magnificent Seven," it is no longer the bargain it was in early 2025.

It's pretty unlikely a five-year-old today will be looking for a job. The need to work will go away. People will still work on the things they want to work on, not because they need to work. Rapid advances in AI and robotics will make most labor effectively free within 15 years, creating an era of extreme abundance and lower prices.

Just for everybody's update, we finalized our agreement. We're going to invest $30 billion in OpenAI. This might be the last time we'll have the opportunity to invest in a consequential company like this.

Getting a demo to work is one thing; building something that remains reliable, observable, explainable, and secure in production is another. As more teams move from AI pilots to production systems, the technical discussion is shifting with them, focusing on the engineering work needed to make these systems usable under real operating conditions.