Economists blame Trump tariffs, AI explosion for threatening global economy There are two things keeping chief economists awake around the globe, if the World Economic Forum's latest survey is any indicator: US President Donald Trump's trade policies and AI. The WEF's monthly Chief Economists Outlook for May was published Wednesday, and paints a generally gloomy picture of the global economy. US …
May we bear in mind, though, that AI has become a catch-all term including any manner of what used to be fondly known as "machine learning"; AI ≠ LLMs.
There is plenty of interesting and useful innovation in the AI = machine learning world; let's not throw out the baby with the bathwater.
We need to remember the early age of the internet. Wondrous things were happening and optimism was running high. I know—I was working in it—elbow high in HTML and Photoshop 3.0. But then dark actors started messing around, corporate slimes were finding ways to scrape info, infiltrate user accounts, etc. Those optimistic days were dying. Today we need ad blockers, firewalls, site security out the wazoo as these dark actors are turning it into a shit-show. Same will happen to AI. Yes, I too can see a small proportion will use it for decent purposes, but quickly it will be used to nix jobs by the corporate greedy. Then the nefarious stuff will start to happen. I say without some serious controls, this thing could be our undoing. My problem is who are going to apply the controls and do they know how to craft those controls. Somebody opened that AI 'Pandora's Box' and we're going to be stuck with it. I wish I could be optimistic, but I've been alive and working tooo long and know how Humanity works. We'll be living in a world of 6 fingers. Just my 2¢ worth.
>” The extraordinary speed of the AI revolution…”
It’s only extraordinary if you only listen to the hype merchants. From my perspective it is running at normal speed for IT fads and will be over before too many AI datacentres will have been built. As noted in another ElReg article, it does look like the downside is starting to come to the fore, which can only mean it’s time to move onto another bandwagon which people can be conned into throwing money at…
> ... and will be over before too many AI datacentres will have been built.
Sadly, I am coming to doubt that. The current business model is clearly to foist AI on you whether you think you need it or not, and to monetise it by slurping ever more of your data to generate advertising revenue. The depressing thing is that, downsides notwithstanding, that may actually turn out to be a sustainable business model.
As I wrote on another Reg comment section, AI may in fact already be working as intended - it's just that "working" and "intended" do not mean what you thought they meant.
"Business leaders, respondents said, need to focus on adapting their processes to integrate AI and retraining workers to work with AI tools. "
And what exactly should they do?
(NB: in the last 1 1/2 years I have seen and yes, sometimes been guilty of involvement in development of the list below)
- C-level announcement of "we expect all employees to familiarise themselved with AI, by using tools like ChatGPT etc" - of course without paying for accounts so limiting them to the even crappier free models
- Pushing out and crowing about "our very own GPT, which we expect everybody to use, rather than the now blocked public GPTs" - then having a bad wrapper around said public GPTs, hoping like hell that whatever puny filters are put in will prevent data leakage
- Going the whole hog and putting in a RAG in feeding in every corporate document - with the RAG data still shoved into some cloud based AI service, because that data stays totes private, the provider pinky-swore it would
Not one said "we are going to full on invest in our own in-house, locked down-and-in models", because they took one look at the cost and had to roll out the defibs for their financial people.
Yeah, Incubus Orange 2.0's a right modern day James Buchanan, America's worst president ever, with his focus on states' rights, here for space weather (nonsense), and minimizing the role of the federal government, here with dismantling it through pimple-faced DOGE brownshirt wankers. Last time around (1.0) he was #3 so yes, he's getting to be #1 and #winning at something ... (i.e.: being the worst)
But hey, it's for the Republicans to impeach him this time 'round Lindsey, as he tanks the economy and tanks the Party of Lincoln, with his Ring of Honor Professional Wrestling Porno Cosplay madministration; the rest of us just don't give much of an fsck ... (doesn't reflect on us!)
The main threat AI poses to the global economy is that OpenAI and similar companies crash and burn. They're currently running on a business model where they lose money on every single query using their LLM products, and this loss increases linearly as their customer base expands. For example, OpenAI are talking about maybe moving into profit by the early 2030s, by which time they will have had to obtain over $100 billion of investment (a conservative figure, there are estimates 3 time this). And this assumes they are allowed to convert to a profit-making business structure by the end of this year.
Should OpenAI in particular go under then, given they have something like 90% of the LLM user base, the effects will be noticeable.
Emulating Brexit on a wider scale will see more extensive damage of the sort the UK has suffered, in the US. Although Trump's taxiffs may end up being little more than 10% or 20% extra sales tax on his loyal subjects, combined with his other policies, the US is no longer a reliable entity, and its positive global influence (aid) and cool power is over. It's tech power may wane too with isolation, embargoes and corporate break ups. The economic damage (and Trump's refusal to take part) means that any green transition is on hiatus, globally, for at least four years. The RotW will have to stick a peg on its nose, hope Trump picks on someone else and improve their game domestically, as right wing extremists are all fired up around the world, emulating him.
So the biggest problem is not the economy but the need for established political parties to up their incredibly low levels of talent and ability, and actually inspire some of their supporters to get out and vote for them, as the right wing populist parties can count on the votes of most of their loon supporters. Handing over cash to reduce the impact of inflation and damaged supply chains isn't enough to keep regimes in power. The requirement to be competent at fire-fighting the damage they caused was always going to see the Tories kicked out. Other regimes might be too. Some hope is offered by Canada, whose electorate got out and voted to not be more like the US. That is Trump's only real value to the West - worth voting to avoid. You would have thought that people would have learned from Brexit. Perhaps they needed the big screen version now broadcast from Washington before they woke up and smelled the covfefe.
Emulating Brexit on a wider scale will see more extensive damage of the sort the UK has suffered,
Utter bollocks.
Brexit was about escaping a restrictive trading bloke and looking for free trade deals with the rest of the world, not imposing massive tariffs and cutting ourselves off from the world.
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2025
