Infinite Avocados

I saw an article recently about the continued growth in the Avocado market. I don’t know why it showed up but something about it tempted me enough to read it. Most of the article was updates on weather conditions and a surge in production in some part of the world. The part that stuck with me was the way the author talked about the future. They spoke as if there was an infinite market demand for avocados and that the only issue the world had was we couldn’t product enough. Avocados are great but its insane to think there’s no ceiling on demand. A trap we seem to fall into again and again with technology.

Imagine for a moment that you have some sort of secret fast growing avocado. You can grow one hundred for every one that others produce. You’re no longer bound by supply and have more avocados than you can sell. The marginal cost has dropped as supply has grown. You need money to buy up farm land and invest in marketing, but seeing your super avocados investors are impressed.

For a while, you’ll naturally do well. People love their avocado toast. Eventually though, you’re going to hit a limit. Even if that limit is eight billion people having avocado toast for three meals a day. As you see that saturation point approach you have a choice. You can remain happy knowing you’ll have sold an immense number of avocados, or you can try and invent more demand.

You can start to tell people that avocados aren’t just great for food, they also make great building materials. Also if you rub them into your skin you’ll slowly age backwards. Is that true? Who knows, but given you’re well financed from your food empire you can probably get away with it for a while. Likely long enough to convince some new avocado investors to buy you some more farmland. Maybe long enough to retire and let others worry about Avocado Homes Inc.

I feel like this is what’s happening right now with AI. It’s happened before with other new hype cycles but AI is the one we’re in. Just like avocado as an ingredient, there’s plenty of real and legitimate demand for AI. Demand that AI is a good fit to fill. There’s also a limit to that demand.

If you pull back the hype the AI of today has constraints and limits. There are tasks that we’re still decades away from mastering. AI has problems we don’t fully know how to solve and don’t seem to be solved with more GPUs. Despite that, there are plenty of people pushing an agenda of infinite growth.

Spend any time on LinkedIn or reading startup news and there are dozens of new companies claiming they’re on a path to make whole industries redundant. First it was artists, now its developers with AI allegedly writing more and more of the worlds code.

We are probably still in the early stages of growth. AI certainly hasn’t saturated the equivalent of the world’s breakfast market but its not likely to either. Worlds like slop and hallucination are becoming more prevalent in discussions. I think people are starting to realise that narrative that we’re only bound by the number of GPUs we can produce is starting to appear as fiction.

No market has infinite growth. You can invent great stories to make the market seem bigger than it is but at the end of the day there’s always a limit. That limit might be high, reaching it might be valuable, but pretending its not there is either ignorant or deceptive.