Sunday, March 29, 2026

Grounded In Reality Piece On AI Mania

I don’t say that because I think that AI models are bad or because I think they won’t get better; I think that AI models are very good and will get much better. No. The fault is not with the models, but with us. The world is run by humans, and because it’s run by humans—entities that are smelly, oily, irritable, stubborn, competitive, easily frightened, and above all else inefficient—it is a world of bottlenecks. And as long as we have human bottlenecks, we’ll need humans to deal with them: we will have, in other words, complementarity.

People frequently underrate how inefficient things are in practically any domain, and how frequently these inefficiencies are reducible to bottlenecks caused simply by humans being human. Laws and regulations are obvious bottlenecks. But so are company cultures, and tacit local knowledge, and personal rivalries, and professional norms, and office politics, and national politics, and ossified hierarchies, and bureaucratic rigidities, and the human preference to be with other humans, and the human preference to be with particular humans over others, and the human love of narrative and branding, and the fickle nature of human preferences and tastes, and the severely limited nature of human comprehension. And the biggest bottleneck is simply the human resistance to change: the fact that people don’t like shifting what they’re doing. All of these are immensely powerful. Production processes are governed by their least efficient inputs: the more efficient the most efficient inputs, the more important the least efficient inputs.

In the long run, we should expect the power of technology to overcome these bottlenecks, in the same way that a river erodes a stone over many years and decades—just as how in the early decades of the twentieth century, the sheer power of what electricity could accomplish gradually overcame the bottlenecks of antiquated factory infrastructure, outdated workflows, and the conservatism of hidebound plant managers. This process, however, takes time: it took decades for electricity, among the most powerful of all general-purpose technologies, to start impacting productivity growth. AI will probably be much faster than that, not least because it can be agentic in a way that electricity cannot. But these bottlenecks are real and important and are obvious if you look at any part of the real world. And as long as those bottlenecks exist, no matter the level of AI capabilities, we should expect a real and powerful complementarity between human labor and AI, simply because the “human plus AI” combination will be more productive than AI alone.

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