Artificial intelligence provides a clear advantage in terms of cost efficiency. However, once this advantage spreads across competitors within an industry, the dynamics begin to change.
Companies that fail to use AI effectively will quickly be eliminated, while those that do adopt it correctly will find that competition shifts toward sacrificing profit margins as cost optimization becomes the norm.
This means that even if only a few firms remain in the market, their overall profitability will inevitably decline.
In other words, it’s a case of “the sound of the drum is pleasant from afar” — AI seems appealing, but in the end, even the surviving companies will struggle to maintain strong profits, leading to lower profitability across entire sectors.
As a result, monopolies may begin to form. The largest and strongest companies could end up surviving alone, creating a risk of market dominance by a few major players.
Another possible outcome is the formation of trusts, where several powerful firms join forces to control the market together.
However, some of the most significant outcomes may emerge from the efficiency gains achieved by non-profit organizations such as governments and foundations.
Over time, this could lead to a weakening of the private sector, while public services become increasingly optimized. As a result, the role and influence of the state itself could grow stronger.
For this reason, events such as government shutdowns in the United States could evolve in very different ways under increasing private sector pressure.
Before the new ecosystem fully takes shape, corporate interests are likely to push for a much smaller and less influential government structure.
As ordinary individual investors, if we fail to anticipate these kinds of impacts brought by artificial intelligence, we may suffer losses during this transition period, which could unfold through a series of small and large crises.
This shift will not follow the pattern of a typical economic cycle—it may instead transform into an unprecedented struggle between the private sector and the state.
The simplest and most immediate example of this is the wave of layoffs in the private sector and the resulting employment challenges. Democracies are on the verge of facing serious tests as they struggle to balance technological progress with social stability.