At this point anything less than "medium growth" will crash the economy. We'll have bigger problems if that happens (think 2000 or 2008)
Duolingo is such a company you would expect AI to help a lot. Surely AI could allow it to cut costs substantially. And yet, in the past year its stock is down 70% and in Q1 2026 profit has not seemed to increase compared to Q4 2025. In fact, other than Q3 of last year which had some tax shenanigans, their profit is relatively flat. Not a great look given that AI is highly disruptive to their product.
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AI is actually insidious. Suppose you're in a competitive industry like Costco making 3% (net profit) margin. Suppose the average costco employee makes 60K. Then you come in and think it would be great to have an AI agent lets every employee ask questions of inventory to help customers. Surely if employees could use AI that could somehow make more money for Costco. Hypothetically let's say this ends up costing about the same as the basic subscription in terms of tokens. $20/employee. Can't be that bad right?
$240 ÷ 0.03 = $8,000 (in other words, generate over 10% of their own salary in marginal additional net profit every year). Is Costco really going to generate 8K more per employee? Nope. And yet, firms like Costco and using AI, and effectively just lowering their own profit margins.
For example, did macro investment in factory automation predict future productivity gains?
Good to see GDP growing.
The amount of money we are talking about could have given the entire US high speed commuter rail.
It's a sign of how much the economy has grown that under "1% of GDP for a few years" now is far bigger than "over 10% of GDP for a few decades" was in the late 1800s.