What will automated firms look like?

**Dwarkesh Patel** (0:00)
When people think of AGI, they imagine what it would be like to have a personal assistant who answers all their questions and works 24-7. But that just underestimates the real collective edge AIs will have, which has nothing to do with raw IQ, but rather with the fact that they are digital. Currently, firms are extremely bottlenecked in hiring and training people. But if your workers are AIs, then you can copy them millions of times with all their skills, judgment and tacit knowledge, intact.
This is a fundamentally transformational change, because for the first time in history, you can just turn capital into compute and compute into labor. You can turn trillions of dollars into the electricity, chips and data centers needed to sustain populations of billions of digital employees.
Think about how limited a CEO's knowledge is today. How much did the real Steve Jobs really know about what's happening across Apple's vast empire? He gets filtered reports and dashboards, attends key meetings and reads strategic summaries. But he can't possibly absorb the full context of every product launch, every customer interaction, every technical decision made across hundreds of teams. His mental model of Apple is necessarily incomplete. Now imagine Mega Steve, the central AI that will direct our future AI firm. Just as Tesla's full self-driving AI model can learn from the driving records of millions of drivers, Mega Steve might learn from everything seen by the millions of distilled Steve apparatchiks. Every customer conversation, every engineering decision, every market response. I think it's hard to grapple with how different this will be from human companies and institutions. You're going to have this blobs with millions of entities rapidly coming into and going out of existence, who are each thinking at superhuman speeds.
It will be a change in social organization, as big as was the transition from hunter-gatherer tribes to a mass of modern joint stock corporations. The boundary between different AI instances starts to blur. Mega Steve will constantly be spawning specialized distilled copies and reabsorbing what they've learned on their own. Models will communicate directly through latent representations, similar to how the hundreds of different layers in a neural network like GPT-4 already interact. Merging will be a step change in how organizations can accumulate and apply knowledge. Humanity's great advantage has been social learning, our ability to pass knowledge across generations and build upon it. But human social learning has a terrible handicap. Biological brains don't allow information to be copy pasted. So, you need to spend years and in many cases decades teaching people what they need to know in order to do their job. Or consider how clustering talent in cities and top firms produces such outsized benefits, simply because it lowers the friction of knowledge flow between individuals. Future AI firms will accelerate this cultural evolution. With millions of AGI's, automated firms get so many more opportunities to produce innovations and improvements, whether from lucky mistakes, deliberate experiments, de novo inventions, or some combination. Historical data going back thousands of years suggest that population size is the key input for how fast your society comes up with more ideas. AI firms will have population sizes that are orders of magnitude larger than today's biggest companies. And each AI will be able to perfectly mind meld with every other. AI firms will look from the outside like a unified intelligence that can instantly propagate ideas across the organization, preserving their full fidelity and context. Every bit of tacit knowledge from millions of copies gets perfectly preserved, shared, and given due consideration. So what becomes expensive in this world? Roles which justify massive amounts of inference compute. The CEO function is perhaps the clearest example. Would it be worth it for Apple to spend $100 billion annually on inference compute for Megastv? Sure. Just consider what this buys you. Millions of subjective hours of strategic planning, Monte Carlo simulations of different five-year trajectories, deep analysis of every line of code and technical system, and exhaustive scenario planning. The cost to have an AI take a given role will become just the amount of compute the AI consumes. This will change our understanding of which abilities are scarce. Future AI firms won't be constrained by what's rare or abundant in human skill distributions. They can optimize for whatever abilities are most valuable. Want Steve Wozniak level engineering talent? Cool. Once you've got one, the marginal copy costs pennies. Need a thousand world-class researchers? Just spin them up. The limiting factor isn't finding or training rare talent, it's just compute. Imagine Mega Steve contemplating, Hmm.

**SPEAKER_2** (5:22)
How would the Federal Trade Commission respond if we acquired eBay to challenge Amazon? Let me simulate the next three years of market dynamics. Ah, I see the likely outcome. I have five minutes of data center time left. Let me evaluate one thousand alternative strategies.