Humans or AI: which will customers prefer?

**TL;DR:** Replacing human workers with AI may cost as much as hiring real people, and humans naturally prefer interacting with other humans. So large-scale AI replacement faces two big hurdles: cost and user experience. Many companies will likely decide the risk isn't worth it. ## Can AI Replace Middle Managers? The Cost Issue Surfaces AI companies are now claiming their products will replace middle managers, not just low-skill workers doing research and fact-checking. They promise massive cost savings. But the thing is, sooner or later AI companies have to start charging real money for their services. Right now, huge amounts of capital are pouring into AI — massive investments — all based on promises of enormous profits down the road. AI companies can't stay in a low-price model forever. They have to start charging real fees, real license fees, and they have to do it very, very soon. I predict those fees will be very high — roughly equivalent to the cost of hiring a real human employee. Yes, I think the license fee for an AI agent that replaces a human job will be about equal to that human's annual salary. And many companies that could buy these licenses will, I think, say it's not worth it. Sure, saving money is good, but if it's a wash, what's the point? Think about it: if a company has to redesign its entire business structure to accommodate AI technology and ends up saving nothing, or maybe just 10%, why bother? Because there are costs associated with transitioning from human employees to AI employees, and I think many companies will see that the time, money, and effort aren't worth it. Completely overhauling a company always carries the risk of breaking something good — hurting the business, hurting actual sales, hurting relationships with customers, clients, suppliers, vendors, marketers, and everyone who makes the business successful. I think some companies will say, "You don't rebuild the plane while it's in flight." It's just not worth the risk — especially if the plane is flying well and already profitable. You know, most companies are proud of what they've built. Asking them to tear it down and rebuild it from scratch with AI is a huge risk that could negatively impact the business. It could affect sales. And given the current backlash against AI, AI data centers, and AI-generated junk content... yeah, Wall Street might like you firing a lot of people and replacing them with AI agents, but customers may not. If you're the CEO of a company that's running fine with flesh-and-blood human employees, are you willing to take that risk? I mean, most companies are afraid of incremental change, let alone a massive transformation like replacing humans with AI agents and rebuilding the entire enterprise. Simply put: If it ain't broke, don't fix it. Especially if there's no huge cost saving on the other side. Plus, after the pandemic, most companies pushed hard to get human employees back into the office. Remote work is declining. So there's a disconnect and contradiction. On one hand, companies want employees back in the office. On the other hand, they're considering replacing those same employees with AI. I mean, it's either one or the other, you can't have both. Which is it? Are employees valuable, or are they just a cost? Aren't they valuable? Companies say they want people back in the office because they like bringing people together to brainstorm, adapt, improvise, and innovate. They understand that's valuable. So I ask: can AI replace that? Can AI agents collaborate as a team the way humans do? Can these agents brainstorm, adapt, manage, and handle crises? Can they innovate like a human team? The answer is probably yes, eventually, but I think not yet. ## Humans Are Social Animals — The Interpersonal Interaction AI Can't Replicate The relationship between capital and labor has always been complicated. Businesses don't want to pay wages. That's true. Yet they also want to recruit the best talent. They understand that labor — humans, workers, employees — is both a cost and a value. Most enlightened businesses know you need to hire the best people you can get. And the tech industry understands this better than almost any other industry, okay? You want your best people working as efficiently as possible, as a team. You want those human teams to generate ROI — return on investment — to justify their salaries. But people also like people. Humans are social animals. We like interacting with each other. If your job becomes interacting only with AI software, I'm not sure you'd want to do that job for a lifetime. Maybe if the price is right and the salary is high enough, but most people get value from their careers and jobs not just from the paycheck, but from the people they meet, their colleagues, and the social networks they build. So I think there are two potential flaws in the AI business model. First, on a per-license basis, it might be as expensive as hiring a human employee, or only slightly cheaper, so the massive AI restructuring isn't worth the risk. Second, if humans at work only interact with AI software, they'll go crazy. Unfortunately, for many people, most of their social activity happens at the workplace. If you take that away, it's a terrible experience — a bad day. A really bad day for them. And society will pay the price. We'll see more depressed, lonely people — not good for any community, neighborhood, society, company, or country. Now, I think about 50 years from now, there will be humanoid robots almost indistinguishable from humans. Maybe humans — real flesh-and-blood people like you and me — will enjoy interacting with those robots. But until then, I'm not sure business owners will replace all or most employees with AI agents. I think what will actually happen is they'll reduce headcount. Yes. Then they'll have the remaining employees use AI to boost productivity and efficiency. That's essentially what we're already seeing. So I think this trend will continue. But I don't think most companies will fire all or most employees and replace them wholesale with AI agents across the entire enterprise. I just don't — because then what is the company? A company is made up of people. If only software remains, what is it? Sure, some businesses will adopt AI at scale — those that write code, build software, or do heavy language work — lots of writing, lots of copy, lots of English text. Those companies, for example, will be able to significantly reduce headcount. ## Managers Want to Manage People, Not AI Another thing: most bosses like managing people. They like delegating to others. Another flaw with AI is that these bosses don't want to use AI. They want others to use AI. Think about your own boss. Do you think they're eager to interact with AI for 8 to 10 hours a day? Most bosses I've met are not tech-savvy at all. They can barely use a laptop. And now they're being asked to use AI all the time? It doesn't make sense. It makes absolutely no sense. But that's okay — they'll hire people like me with technical skills to do the work for them, right? That's what bosses do. That's what middle management and senior management — especially senior management — do. In general, that's how you become extraordinarily successful: you hire other very talented people to work for you, and you focus on managing the business, managing employees, finding new customers, and convincing those customers to buy more of your products and services. That's what directors, senior VPs, and executives should do. They should be managing the business, not interacting with AI agents. If you're a top performer in your company and you spend almost an entire day not interacting with people, you're probably doing it wrong. You know what I mean? If you're a senior VP, you have a team that uses software, so you don't have to. Managers manage. They don't do the grunt work. They don't dive into software programs — AI software programs — and do the work themselves. They direct the team to do that work. Okay? They manage the team. They make sure the team hits KPIs, does all that stuff, right? Managers want to manage humans, not AI agents. Okay? That's largely genetics, sociology, and interpersonal skills. Because humans, as I said, are social creatures. We want to work with other people. We don't want to be software riders all day. That's already a big problem. Okay. Most normal, well-adjusted people would rather interact with another person than with their smartphone. Right? Remember, almost every time you pick up your smartphone, you're using it to text another person. You know, we all say, "Oh, screens are terrible." They kind of are, but the killer app for smartphones is messaging apps — the ability to instantly communicate with someone who's not in the room, in real time. Phone calls are a bit too intrusive and not very private because everyone can hear you. But texts, messaging apps — that was the key breakthrough for smartphone adoption. Facebook exploded and took over the world because it was a collection of people — or at least mini-sites for individual humans to tell the rest of the world what they're doing and thinking. TikTok is exploding now because the content is people dancing funny, singing, telling jokes. In fact, everyone hates AI junk content. All social media networks are doing everything they can to purge AI junk from their platforms. You know, AI-generated human characters, avatars — social media is trying to filter them out and eliminate them because they want the user experience to be human-to-human, not human-to-AI, not human-to-avatar. There are some exceptions. AI is great at making funny animations that kids love to watch, but kids have always liked cartoons, so that's nothing new. Once you grow up, you stop watching cartoons and start watching live-action movies with real human actors because people love people. People love hearing stories about other people. Everyone says you have to make content with a story, a narrative arc. It's true — because people love hearing stories about what others are doing. People enjoy learning from others, from their stories. Most people feel happiest when interacting with others — friends, family, and, dare I say, colleagues — at least some of them. Everyone has a colleague they don't particularly like. But most people enjoy coming to work and working with their colleagues. When people aren't working — holidays, weekends — they do social activities. They hang out with other people — friends, family — and do things together. You work five days a week so you can do two days of that very enjoyable stuff on the weekend. But if you spend the entire weekend playing video games or streaming TV, you might need to talk to a therapist. Because if you're a normal, well-adjusted person, you should seek human interaction. You shouldn't be that lonely. Okay, we already have a loneliness crisis. There's a lot of data. Many studies show that excessive interaction with devices can become a problem. But that's exactly what AI promises: you'll interact with devices and AI software, not with people. Right? You know, do people really want to do that for 8 hours, 10 hours, 60 hours a week? No. No, they don't. Listen to me, they don't want to. Okay? Even if you pay them $500,000 a year, they still won't like it. ## For AI to Fully Replace Humans, Two Obstacles Must Be Overcome For AI to take over all our jobs — every single one of us — I think it needs to become much more sophisticated and personable. It needs a personality. It needs to be able to tell a joke occasionally. It needs to be able to chat about what you did over the weekend, like humans do on Monday morning. You know what I mean? It needs to make interacting with it more interesting. AI not only has to save companies a lot of money; the user experience also has to improve dramatically — to the point where it's like interacting with your favorite colleague. You know, if you're anything like me, you've probably had a job that didn't pay enough and wasn't challenging enough, but you stayed because you liked your coworkers and the company culture. You know, I know a lot of people who changed jobs for a higher salary, but ended up working with a bunch of not-so-nice people, and they regretted making the change. They regretted it because they didn't realize how good their work-life balance was, and how great the company culture was among all employees — from the lowest-paid worker to the CEO. Getting AI to mimic that culture, that human social interaction — I'm not sure AI can do it, at least in its current version. So to summarize: The cost of AI is huge — covered by investors, not customers. The real cost of deploying AI at an enterprise scale sufficient to replace all employees may actually be higher than having real human employees. And humans actually like working with other humans. They don't like staring at a screen being software riders for 8 to 10 hours a day. So if AI is really going to change the world and become extremely profitable, it has to overcome these two obstacles. One is cost. Two is user experience. Cost has to come down. User experience has to go up. And in its current version, AI is far from clearing either hurdle. Maybe in the future it will. But even then, I think many businesses will be reluctant to rebuild their entire enterprise and organizational chart — replacing everyone top to bottom with AI and driving out all humans. I think many businesses will see massive risks, lots of unforeseen consequences. It would be seen as too disruptive, potentially affecting sales. Those businesses already running smoothly and profitably with human employees may not see the need to rebuild with AI. Additionally, I think many companies might actually go against the trend of large-scale AI adoption and market themselves as "human-driven." Source: https://youtu.be/8SUT7PxM-DE