The Most Terrifying Graph I Have Ever Seen

The entire premise of the AI boom makes no sense. But it was never meant to.

Photo by Nahrizul Kadri on Unsplash

The AI boom is idiotic, needlessly complex, and wrapped up in a huge amount of convoluted propaganda that makes it nearly impossible to unpick it all and figure out what the hell is actually going on. What we need is a helicopter view. Something that helps us cut through the crap and get a lay of the land. Only then can we chart a way forward that doesn’t end in disaster. There is one simple graph that does this better than anything I have ever seen. However, it is truly terrifying, and not for reasons you might think, because AI has very little to do with AI.

The logic surrounding the AI boom is utterly moronic. The idea is to gamble the entire Western economy by heavily investing in technology that will wipe out almost all jobs. It is a lose-lose scenario. If the bet fails, the economy crashes. If the bet succeeds, the economy crashes. And this graph shows that this is precisely what is happening.

Source: QEX Management

Above is a graph of the value of the S&P 500 (in green), an index fund of the largest 500 companies in the US, and the total number of job openings in the US (in blue). As you can see, historically, the two have had a very strong correlation. If you think about it, that makes perfect sense. When the economy does well, companies expand and hire more people, which increases their value. Even during times of significant economic change, such as 2007–2008 and 2020, the two increased and decreased at more or less the same rate.

From November 30th, 2022, this correlation dramatically reversed. Since then, the S&P 500 has increased a staggering 70%, yet job openings have plummeted by 30%. As the economy grows, more jobs are created — that is an utterly fundamental part of not just our economy, but how our society functions. Something monumental must have happened here to decouple growth from labour, something on par with the Industrial Revolution.

Well, guess what came out on November 30th, 2022? ChatGPT.

AI is filling the jobs and powering growth. The economy doesn’t need us anymore. This insane lose-lose scenario is playing out before our eyes.

Or is it? Because, actually, AI is not replacing jobs at all.

I know I keep referring to these studies, but they are so damn important. A recent MIT report found that 95% of AI pilots didn’t increase a company’s profit or productivity. A recent METR report also found that AI coding tools actually slow developers down. Why? Well, generative AI models, even the very latest ones, often get things wrong and “hallucinate”, which requires considerable human oversight to correct. IT consultants Gartner attempted to quantify this and found that AI agents fail to complete office tasks around 70% of the time. A recent Harvard Business Review survey has found that 40% of workers have had to deal with “workslop” in the past month, which they define as “AI-generated work content that masquerades as good work but lacks the substance to meaningfully advance a given task.” Each workslop incident wastes nearly two hours on average, meaning that for every 10,000 workers, workslop costs $9 million per year in wasted time, easily wiping out any productivity gains from deploying AI and reducing overall productivity.

So, the data actually shows that AI can’t even successfully augment most jobs and make workers more productive, let alone replace jobs. In other words, it hasn’t decoupled growth from labour. Economic output is still dependent on labour. So, what on Earth is going on with that graph?

Well, something seismic has happened to the economy, but it wasn’t caused by AI. Instead, AI is just the symptom.