The Singularity Is Nearer: When We Merge with AI

by Ray Kurzweil

Classical economic theory says that prices will tend toward goods’ average marginal cost—because businesses can’t afford to sell at a loss, but competitive pressure forces them to sell as cheaply as they can. Further, since more useful and powerful products have traditionally cost more to produce, there was historically a strong relationship between a product’s quality and its price reflected in GDP. Yet many information technologies have become vastly more useful while prices have stayed more or less constant. A roughly $900 (2023 inflation-adjusted) computer chip in 1999 could perform more than 800,000 computations per second per dollar.[94] By early 2023 a $900 chip could do nearly 58 billion computations per second per dollar.[95] So the problem is that GDP naturally counts today’s $900 chip as equivalent to one produced over two decades ago, even though the current one is more than 72,000 times more powerful for the same price. Thus, nominal wealth and income increases over the past few decades do not properly reflect the massive lifestyle advantages enabled by new technology.