🔮 Exponential View #550: Productivity and jobs; the slop-economy; loving vapes++

An insider's view on AI and exponential technologies

The level of deep insight into technological trends and forward-looking info you share is unmatched. No one is doing it like you. – Susan, a paying member

Hi,

Welcome to our Sunday edition, where we explore the latest developments, ideas, and questions shaping the exponential economy.

Enjoy the weekend reading!

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AI, jobs and productivity

The St. Louis FED estimates that generative AI may have increased labor productivity by up to 1.3% – and has had positive effects on industry-level productivity. While that may sound modest, a sustained 1.3% annual productivity boost would be transformative¹.

Source: Federal Reserve Bank of St. Louis

We’re seeing the micro‑signals of this shift inside firms. A new paper found that AI agents increased code output by 39% without any decline in short-term quality. More telling: for every standard deviation increase in experience, developers accept 6% more agent‑generated code. Senior engineers are simply better at delegation, and delegation is a skill that compounds with time. As AI takes on more execution, the premium – particularly for those entering the workforce – will move from raw output to orchestration.

I dug into this question with Ben Zweig of Revelio Labs, which builds its own data-driven view of the labor market. Ben and I share the view that it’s probably too early to really see AI impact in the early hiring. Ben’s perspective is that softening in early hiring is coming from somewhere else:

there’s a lot of uncertainty in the labor market, partially due to AI, partially due to policy. As a result, employers have a high discount rate​. Young workers are the workers that are more uncertain​. So, it’s a kind of high-risk, high-reward type of bet, whereas more experienced hires are the safer bets​.

And to the million-dollar question for parents of “what should my kid study?”, Ben gave two concrete recommendations, which you’ll find at the end of our conversation.

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AI bubble watch – a weekly update

📈 Quick read: AI remains in expansion mode, but funding quality is deteriorating. Details on the week’s movers and dislocations below.

Boom/Bubble dashboard update: We’ve added projected trajectories for each of the five key indicators between now and 2029 – the indicator history and outlook is interactive and you can access it for free on the Boom/Bubble website.

Movers:

1. CoreWeave cut its 2025 revenue forecast to $5.05–$5.15 billion after delays in building new data centers. Investors did not like that; its shares fell by nearly a quarter. The cost of protecting against a CoreWeave default, measured by a 10‑year CDS, has jumped more than 60% over the last six weeks to 700 basis points. Likewise, Meta signaled AI spending could exceed $100 billion next year; shares fell 12.6%.