How Falling Energy and Labor Costs Will Transform Society

The Twin Engines of Abundance

I see an emerging world filled with accelerating levels of abundance thanks to plummeting costs.

A vibrant, creative and constantly evolving place where the two most significant constraints on human progress and well-being – (1) the cost of energy required to power our lives and industries, and (2) the cost of the labor needed to produce goods and services – are simultaneously and dramatically reduced.

Key technologies are entering commercial viability: nuclear, robotics, AI and more — all at the same time. Each positively influencing the rate of technological breakthroughs.. and they all interact with each other in different ways, amplifying the leverage and total acceleration across the system. I talked about what this world will look like recently on a podcast - the conversation focused on decentralized AI and the rising power of machine learning in general:

AI systems and AI-augmented researchers are making breakthroughs in fundamental technologies (like materials science) that feedthrough across all tech trees. That’s just one field. Imagine what AI is doing for computer science, information theory, nuclear engineering, and hundreds of other fields — again, with all of these areas of acceleration “touching” each other. This will change all industries across all nations, at accelerating rates, forever. We are entering the greatest renaissance in human history.

These topics are not science fiction; humanity is currently positioned between two emerging powerful, technological mega-trends: the plummeting cost of clean, sustainable energy and the exponentially decreasing cost of "intelligence” manifesting as increasingly capable and affordable AI and robotics.

This convergence represents more than just incremental technological improvement. It is the potential bedrock for a new era of unprecedented human prosperity, creativity, health, and opportunity.

By radically lowering the input costs for nearly everything society needs and values, this twin-engines of abundance promise to make essential goods, services, and life-enhancing experiences vastly more accessible to everyone. Understanding the profound societal uplift driven by cheap energy and cheap AI-powered labor is key to navigating and embracing the transformative decades ahead.

The First Engine: Energy Too Cheap to Meter?

Energy is the invisible hand that shapes civilization.

From the first controlled fire to the steam engine that powered the Industrial Revolution, access to denser and more affordable energy sources has consistently driven economic growth, expanded human capabilities, and improved quality of life. For centuries our primary energy sources – fossil fuels – have been inherently finite, geographically concentrated, and environmentally triggering, creating constraints and conflicts.

We are now entering a new energy paradigm.

Driven by relentless innovation, economies of scale, and supportive policies, the costs of sustainable energy technologies are in free fall.

Solar photovoltaic panel costs, for instance, have dropped by over 90% in the past 15 years, and wind power costs have followed a similar trajectory. Lazard's Levelized Cost of Energy (LCOE) analyses consistently show new utility-scale solar and wind projects outcompeting not just new, but often existing fossil fuel plants on cost alone in many parts of the world. This isn't just about saving the planet; it's about fundamentally cheaper energy.

Breakthroughs in energy storage (better batteries, hydrogen, etc.) and smart grid technologies are overcoming the intermittency challenges of renewables, paving the way for dependable, clean power grids.

Complementing these variable renewables, advancements in next-generation nuclear power (including Small Modular Reactors - SMRs) promise reliable, carbon-free baseload power with enhanced safety features and potentially lower costs than massive traditional plants.

The societal implications of near-zero marginal cost energy are staggering — across housing, manufacturing, logistics and more.

Heating and cooling homes, powering appliances, and charging electric vehicles becomes a negligible expense for households, freeing up significant disposable income.

Energy-intensive industries like steel, cement, and chemical production, currently major cost centers and polluters, can operate cleanly and far more cheaply, drastically lowering the cost of finished goods, from cars to infrastructure.

Energy-intensive processes previously deemed too expensive become commonplace. Large-scale water desalination can provide abundant fresh water to arid regions. Vertical farms, powered by cheap electricity and optimized lighting, can grow fresh produce locally year-round, anywhere, reducing transportation costs and increasing food security.

Abundant, reliable, clean, and radically inexpensive energy is the foundational lubricant for a thriving global society, removing a fundamental constraint on what we can build, create, and achieve.

The Second Engine: The Declining Cost of Labor via AI & Robotics

Running parallel to the energy revolution is the equally transformative decline in the cost of "intelligence" – the ability to perform tasks that previously required human cognition and physical dexterity.

This is driven by the exponential progress in Artificial Intelligence and robotics. Moore's Law's relentless march in computing power provides the substrate, while breakthroughs in machine learning allow AI systems to learn, adapt, and perform increasingly complex cognitive tasks. Simultaneously, advancements in sensor technology, materials science, and actuation are making robots more dexterous, mobile, and capable of interacting with the physical world.

SIDE NOTE: Before you say “think of the jobs” remember humans weren’t born to be wage slaves in factories or working as spreadsheet manipulators for mega corps. AI x Robotics are going to free our time for higher value work. This is the fate of technology. To make our lives better.

Elon is running hard on Optimus. Difficult to bet against him. They have major ML skill and heavy infra behind them, and the team are profoundly gifted engineers, developers and designers. Figure are focusing on the AI brain first & leveraging economies of scale to help replace man hours with machine hours. All of these robotics companies are increasing actuator complexity, improving weight distribution, enhancing sensor networks and constantly hacking together even better algorithms to make everything work.

The cost of deploying these AI and robotic systems is falling rapidly, while their capabilities are soaring. This translates directly into a dramatic reduction in the effective cost of labor across nearly every economic sector - let’s list a few:

• Manufacturing & Production: Zero light and low air pressure factories operating 24/7, managed by AI and staffed by robots, producing customized goods with unprecedented efficiency and minimal cost. This hyper-automation slashes production expenses for everything from electronics to clothing.

• Logistics & Transportation: Autonomous trucks, delivery drones, and highly automated warehouse systems drastically reduce the cost of moving goods, making products cheaper and delivery faster. The friction of distance diminishes.

• Cognitive Services: AI is rapidly automating or augmenting tasks in fields previously thought immune. AI can handle complex customer service inquiries, draft legal documents, write code, analyze medical scans with superhuman accuracy, manage financial portfolios, provide real-time translation, and offer personalized education. This dramatically lowers the cost and increases the accessibility of expert knowledge and services.

• Physical Services & Care: Increasingly sophisticated robots can assist with elder care, perform complex surgeries with greater precision, maintain infrastructure, clean buildings, and even assist in disaster recovery, reducing the cost and improving the quality of essential physical services.

• Agriculture & Food Production: AI-powered precision agriculture optimizes water and fertilizer use, while robotic systems handle planting, monitoring, and harvesting, boosting yields significantly while lowering labor costs and environmental impact.

I could run down a list with 20 more bullets like this… the point is the change will be systemic and dramatic.

The reduction in labor costs doesn't just mean cheaper goods; it signifies a fundamental shift in the value of human effort. By automating repetitive, dangerous, or tedious tasks (both physical and cognitive), AI and robotics free up human potential.

This leads to:

1. Vastly Cheaper Goods & Services: Making basic necessities and advanced services affordable for a much larger portion of the global population.

2. Increased Availability & Personalization: Expert advice, personalized education, bespoke products – things once luxuries for the few – become accessible to the many.

3. Reduced Drudgery & Increased Leisure: Automation offers the genuine possibility of shorter work weeks, more time for family, creativity, learning, and community engagement, funded by the immense productivity dividend.

This immense productivity dividend not only makes goods cheaper but potentially changes our relationship with consumption itself. With basic needs met more easily and more time available for non-material pursuits like creativity, learning, and community, perhaps technology-driven abundance offers a path beyond consumerism, at least partially?

Where Cheap Energy Meets Intelligent Automation

The true transformative power emerges when these two engines – cheap energy and cheap AI-driven labor – operate in concert.

They are better together, believe me.

Their effects are not merely additive; they are multiplicative, creating a virtuous cycle that accelerates progress exponentially:

The massive data centers required to train and run sophisticated AI, and the vast fleets of robots performing physical tasks, are energy-intensive. Without cheap, abundant energy, the full scale of the AI and robotics revolution would be economically and environmentally prohibitive. Plentiful, low-cost clean energy removes this critical bottleneck, unleashing the full potential of automated systems. The energy cost of training that massive AI model becomes trivial when powered by near-free solar or nuclear energy.

Conversely, AI is indispensable for maximizing the potential of the new energy system. AI algorithms optimize the design and placement of renewable energy installations, manage complex power grids integrating variable sources and storage, predict energy demand with remarkable accuracy, design more efficient industrial processes, and accelerate the research and development of next-generation energy technologies. AI makes the cheap energy transition faster, smoother, and even cheaper.

We are building factories powered by virtually free solar and wind energy, orchestrated by AI overseeing legions of robots, churn out durable, customized goods using recycled materials processed with cheap energy.

Our family office has been pitched incredible energy and infrastructure deals lately including massive desalination plants driven by dedicated SMRs and other power sources including offshore tidal facilities providing limitless fresh water. We’ve been pitched AI-managed vertical farms near population centers, powered by cheap renewables, designed to guarantee local, affordable food supplies, immune to climate fluctuations. These pitches were interesting but the waste-to-energy plant manned by robots and plasma arc gasification systems made me realize even trash has value in an advanced enough world.

AI, robotics and energy too cheap to meter will change the world.

The convergence of plummeting energy costs and the declining cost of AI-driven labor is not another tech trend; it is a seismic shift with the potential to redefine the human condition. We are on a path characterized by widespread abundance, dramatically improved quality of life, liberated human potential, and the ability to tackle grand challenges like poverty, disease, and environmental restoration on a scale never before possible.

The path forward requires conscious choices, though.

We must accelerate the transition to sustainable and efficient energy sources. We must invest in the development and deployment of AI and robotics while simultaneously building the social, educational and economic infrastructure to adapt to the changing nature of work and life in general.

We are lucky to be living through this time of transformation.

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I started Life in the Singularity in May 2023 to track all the accelerating changes in AI/ML, robotics, quantum computing and the rest of the technologies accelerating humanity forward into the future. I’m an investor in over a dozen technology companies and I needed a canvas to unfold and examine all the acceleration and breakthroughs across science and technology.

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