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AI may take much longer to replace people than today’s market narrative suggests, because the scarce inputs are not only compute, models, and automation, but also human needs, taste, emotion, trust, habits, and the slow-moving structures of society. Technology should continue to raise efficiency and lower costs without eliminating the demand that gives economic activity its purpose. Against inflated AI narratives and valuations, the essay therefore favours reasonably valued consumer businesses with dependable cash flow and durable brand and distribution advantages as a long-term defensive allocation.

AI-generated digest · reviewed by the author A quick orientation to the essay’s central ideas

AI may be much further from replacing human beings than the market currently imagines.

What is truly scarce is not only computing power, models, and automation. It is human needs, taste, emotion, trust, consumption habits, and the complex structures of society that change only slowly.

Changing AI towers stand above deep golden roots containing scenes of food, clothing, care, friendship, beauty, music, and home.
Technology changes quickly; the roots of human demand move on a different clock.

That is why I do not believe technological development will ultimately “discard humanity.” On the contrary, over the long run, technological progress will most likely continue to give value back to human society: raising efficiency, lowering costs, unlocking productivity, and making some forms of steady demand more valuable.

As the AI narrative grows larger and valuations become more inflated, I currently find myself more drawn to consumer businesses with reasonable valuations, dependable cash flows, and clear moats in brand and distribution.

These assets may not be as exciting as an AI story, but they answer to human needs that persist over the long term: what we eat, wear, and use; how we socialise; our sense of beauty; our health; and the emotional value we seek.

If they can be bought at a fair valuation—or better, when undervalued—and held for the long term, I believe they make a compelling defensive allocation.

AI will change how we produce. It will not eliminate human needs.