The allure of AI creating boundless productivity may lead, perversely, to zero demand and the death of society because it is too dependent on a technology. It has happened before.

It is mathematically predicted that the widespread adoption of Artificial Intelligence will end up destroying the very economy it purports to assist, along with billions of jobs. Put simply, as firms compete to sack workers and replace them with AI, they end up eliminating the very customers and paychecks they rely on to buy their products.

The mad rush to adopt AI has become a suicide spiral where firms are stampeded into retrenching vast numbers of human employees faster than they can find new work, so contracting consumer demand for everything. The paradoxical result: a more productive economy with far fewer consumers.

That’s the warning sounded by US economists Brett Falk and Gerry Tsoukalas in what is not a theory, but rather a mathematical proof that “firms automate their way to boundless productivity and zero demand". Worse, they add, there is almost nothing that can be done to stop it, short of a heavy tax on all AI whenever it replaces a human. Roughly 80 per cent of all jobs are susceptible to automation, they caution.

“Even as AI-driven layoffs sweep across industries, and even as every firm recognizes that vanishing paychecks mean vanishing customers, not one of them will stop,” the scholars say. Fear of their competitors snatching an AI advantage drives them all down the same path of self-destruction by loss of business.

At the same time, AI has other grave shortcomings that are only now becoming plain. The data centres that power it are massive guzzlers of both electricity and water, depleting these vital resources and driving up utility bills for citizens in the........

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