The AI economy is creating a new elite, but what about the rest of the world? The San Francisco Bay Area is experiencing an AI frenzy, with top programmers and developers being offered lucrative compensation packages to switch firms. Young engineers are contemplating early retirement, and the city is crawling with startups aiming to capitalize on this technology. However, beneath the frenzy lies a palpable anxiety among this young super-elite, as they fear being left behind by the automation of white-collar work, especially coding jobs. Economists debate whether AI will destroy or create jobs, but the prevailing mood in Silicon Valley is pessimistic. The article highlights the potential for AI to create a permanent underclass, not just in the US but globally. While South Korean firms have become trillion-dollar giants on the back of AI's demand for advanced memory chips, Europe has produced fewer success stories. Countries that fail to carve out a place in the AI economy risk ending up on the losing side, with no way to cushion the shock of mass job displacement. The article explores the risks and opportunities for various countries, including India, China, and African and Latin American nations. It argues that natural-resource wealth can be a curse as much as a blessing, and that countries need to develop the political and economic institutions to spread the gains across society. The US may be more dynamic, but it is hardly better prepared for AI's impact on labor markets. The danger is not confined to national borders, as AI threatens to widen the gulf between technological winners and losers, consigning billions of people across the developing world to fall ever further behind. The article concludes by questioning what such a world would look like and how to prevent it from tearing itself apart.
