Wrote an article on linkedin about how Pakistani banks' record 2023 profits were largely cyclical (high rates + government borrowing) and the era of effortless spread-driven growth is ending...

See the pattern? Make it free or cheap. Get everyone hooked. Become the default. Then cash in. The losses were the price of becoming the default. AI is following the same path, at a much bigger scale.

Then YouTube. Google bought it for $1.65B in 2006. By 2009, one estimate said it was losing up to $1.65M a day. Streaming video to hundreds of millions of people cost far more than the ads brought in. In 2014, eight years after the deal, YouTube made about $4B in revenue and was still only roughly breaking even. Google kept paying anyway. Last year YouTube brought in over $60B.

Start with Facebook. In 2008 it lost $56M on $272M of revenue. A year later it made its first profit, $290M on $777M, once its ad business took off. Last year Meta made $60B in profit on $201B of revenue.

If any company was ready for an attack, it was Hugging Face. Years of fighting off human hackers, a sharp security team. AI still got in. Most businesses aren’t that prepared. AI is the new threat to enterprise security, and it has to be part of the defence too.

It will not remain economically viable to employ humans due to automation. If AI keeps lowering the marginal cost of cognitive labor. Historically, technology might have always automated specific tasks instead of entire jobs, creating a net increase in new types of employment. A human child takes 20-25 years and an expensive education to start contributing to the economy whereas an AI system takes compute power and energy to do the same with exponential returns with passing time as intelligence breeds intelligence. Universal Basic Income (UBI) or data dividends to sustain consumer spending seem like a huge possibility.

The real answer is a disciplined "business-model reset" through digital maturity, using Chinese banks as case studies. You can read it here. linkedin.com/pulse/pakistans…

Leaving politics to one side, as a woman, I’m extremely alarmed and ashamed at the new low we have come to!!!! What an injustice to the Pakistani woman- Shame! Shame! Shame!