When the AI bubble bursts, what will Australia do with the tools it built? One man thinks he has the answer

When the AI bubble bursts, executives who enthusiastically replaced their staff with AI tools will learn that it takes a “really long time” to replace those lost skills, says Cory Doctorow, a science fiction author and journalist. But those in creative fields should also be warned not to put all their faith in copyright as the best way to safeguard their work, Doctorow warns, just one week after the Australian prime minister, Anthony Albanese, promised to ramp up protection against AI companies who refuse to pay.

In his new book, The Reverse Centaur’s Guide to Life After AI, the man who coined the word “enshittification” says the question isn’t “Are we in an AI bubble?” but “When will the bubble burst?”

The AI bubble and its fragility

“The thing about bubbles is that after they burst, we look back and we say, ‘Well, obviously that was the weak link,’” he says.

The AI bubble is being kept afloat through the massive investments being made from Gulf sovereign wealth funds and billionaires into new datacentres, Doctorow says. If some of those deals begin to collapse, so could the bubble.

The circular investment in the AI sector - between the chip manufacturers, AI companies and tech companies using AI - “could easily” be the first domino to fall, he adds. Or if the AI companies including Anthropic and OpenAI continue to delay their initial public offering and struggle to get new funding.

“We can see in retrospect, when we don’t have to continue pretending that this thing is going to go on for ever, that it was always very, very brittle,” Doctorow says. “It was always very fraught.”

Loss of skills when workers are replaced

Executives in industries that were promised by those selling AI that the technology could cheaply replace their workers will find those skills hard to bring back when the dust settles. Workers fired, pushed into retirement or retrained in other fields will leave gaps of knowledge. Detailed knowledge of business processes can’t be readily transferred or recovered, he says, “and you can’t just recover it like the workers who have it when you scatter them to the four winds”.

“It’s going to be a bit a little like Fury Road where there’s just going to be stuff you have but we don’t know how to do again. And it’s going to take a really long time to figure out how to do it again.”

Copyright fix on AI ‘won’t solve anyone’s problems’

Albanese last week said the Australian government would have “plain as day” laws on copyright to ensure AI companies that train their models on music, books, news and other creative works pay to use it. This followed reports the government was being lobbied by AI companies to introduce a text and data mining exception into Australian copyright law. The announcement was broadly welcomed by creative sectors in Australia.

Doctorow argues that using copyright law “won’t solve anyone’s problems” - a position he says doesn’t put him on the side of the AI companies but also doesn’t put him on the side of the large media companies.

“It’s not like the media companies suing the AI companies want to pay media professionals, right? Like, no one has ever accused Rupert Murdoch of feeling that journalists don’t get enough money.

“The only other constituency, apart from a few creative workers, for a new copyright is our bosses.”

He says ensuring workers have labour law rights over the terms in which they use AI and over their creative output would be better.

Government investment advice

Doctorow also says governments should not invest in AI right now but should instead wait for the market to crash and build based on open-source AI models when the market shifts.

“Let’s not be suckers. We’re going to have tons of hardware. We’re going to have tons of people who know how to use the hardware to do useful things. And we’re going to have means, motive and opportunity to improve these open-source [AI] models.”

What will be left for the average person is “a bunch of useful tools”.

Vibe coding and tech debt

“Putting vibe coded stuff into production [in companies] is creating tech debt at unimaginable scale,” he says. “But vibe coding for the thing that you use to connect your smart alarm clock into your smart coffee-maker is fine.

“Who gives a shit if it stops working? You just do it again.”

Appearances

Cory Doctorow appears at Sydney’s Festival of Dangerous Ideas from 22 to 23 August and Melbourne’s the Capitol on 25 August, presented by the Wheeler Centre and Now or Never. The Reverse Centaur’s Guide to Life After AI published by Verso is released on 4 August and is available for pre-order now.