Economist Hank: AI is costly, free vision unrealistic

Steve Hanke, an economics professor at Johns Hopkins University in the US, recently said that the idea of AI eventually being free and costing almost nothing is unrealistic. He pointed out that AI is a resource-intensive technology, requiring huge amounts of water, electricity, and hardware like GPUs, with ongoing costs for each service. Microsoft, Alphabet, Amazon, and Meta are expected to spend about $700 billion this year, possibly rising to $1 trillion by 2027.

Hanke, who served as an economic advisor to former President Reagan, dismissed fears that AI would replace most human jobs, saying companies won't fire all employees for AI because in many cases, AI costs more than human labor. He criticized some AI promoters as "charlatans" who confuse AI with traditional software.

Elon Musk, CEO of Tesla, holds the opposite view, believing AI will greatly boost efficiency and cut costs, even suggesting people don't need to save for retirement. But many experts disagree with Musk. Investors Mark Cuban and Michael Burry also warned about the scale of AI investment and Nvidia's role, seeing risks of circular investment in the industry.