AI Wealth Truth (61): Why AI Makes "Skills" Less Valuable

I. "Learn a skill and you will never worry for life." That was the creed of our parents' generation. Accounting, law, medicine, programming. Master a professional skill and you get stable high income. This logic is being overturned by AI.

II. Let us start with a basic economic principle: price is determined by supply and demand. When supply is scarce and demand is strong, price is high. When supply is ample and demand is unchanged, price falls. This pricing law applies to any commodity, including skills.

III. In the past, many skills were scarce. Becoming a lawyer required years of study and exams. Becoming a programmer required mastering complex programming languages. Becoming a doctor required more than a decade of training. Scarcity supported high pay.

IV. AI is doing one thing: commoditizing skills.

V. What does commoditization mean? When something becomes standardized, scalable, and widely supplied, it becomes a commodity. The result is: prices fall and margins approach zero. Think of rice, oil, and electricity. They are commodities. You do not pay a premium for who produced them.

VI. AI is turning skills into commodities.

VII. Example 1: translation. In the past, speaking multiple languages was a scarce skill, and translation could charge high fees. Now, Google Translate, DeepL, and ChatGPT can translate instantly. Translation prices have collapsed. Many translators lost jobs or saw income decline. Translation has been commoditized.

VIII. Example 2: writing. In the past, writing business copy, news reporting, and market analysis required professional training. Now, AI can generate decent text in seconds. Low-end writing jobs are disappearing. Prices are collapsing. Writing is being commoditized.

IX. Example 3: programming. In the past, programmers were scarce talent. Ten years ago demand exceeded supply. Now, GitHub Copilot and ChatGPT can generate code automatically. Entry-level programming work is shrinking. Lower entry barriers mean competition intensifies. Programming is being commoditized.

X. Example 4: legal research. In the past, law firms hired large numbers of junior lawyers for case research and document review. Now, AI legal tools can finish in minutes what used to take days. Junior roles are shrinking. Legal research is being commoditized.

XI. What is the essence of this trend?

XII. AI is an infinite supplier of skill. Once AI learns a skill, it can serve infinitely many users at once. Marginal cost approaches zero. One translation-capable AI can replace millions of human translators.

XIII. How is this different from previous automation?

XIV. Past automation mainly replaced manual labor and cognitive tasks with clear rules. Assembly lines, bank tellers, call centers. People assumed creative work and professional judgment were safe. AI is breaking that barrier.

XV. AI capability is expanding quickly. In 2020, AI could not write decent articles. In 2023, AI writing can be better than most people. In 2025? 2030? The boundary of AI capability keeps pushing outward.

XVI. Which skills will be commoditized?

XVII. Pattern 1: standardized skills get commoditized first. If a skill can be described and evaluated clearly, AI can learn it more easily. Translation has standard answers. Code has right and wrong. Legal documents have templates. The more standardized, the easier to replace.

XVIII. Pattern 2: skills that do not require physical presence are commoditized first. AI cannot do surgery today because it needs a robotic body. But AI can do remote analysis and online service. Knowledge work gets hit before physical work. This is counterintuitive.

XIX. Pattern 3: mid-level skill is commoditized first. AI outputs are "above average" but not elite. If your skill is around that level, you get replaced directly. Only top-level skill may be temporarily safer. "Pretty good" becomes the most dangerous position.

XX. What does this mean for individuals?

XXI. A single skill is becoming less valuable. A skill you spend 10 years learning may be commoditized five years later. You cannot live on one skill for life anymore. Skills have a shorter shelf life.

XXII. Skill combinations may matter more. AI is strong at single tasks. Humans can combine multiple domains and do cross-disciplinary work that AI struggles with. Combinations like "tech + business", "design + engineering", "writing + data" may be scarcer.

XXIII. The skill of using AI becomes important. Driving is not valuable, but making money with Uber is. Writing code is not valuable, but using AI coding to solve complex problems is. Skill shifts from "doing" to "directing AI to do".

XXIV. Skills are depreciating. It is a brutal but real trend. In the past, scarcity supported high pay. AI makes skills less scarce. When supply is infinite, price trends toward zero. It is not that you are not good enough. The rules changed. Skills that were excellent under the old rules may be worth nothing under the new rules. The only way out is continuous learning and continuous repositioning. But that also means: there is no permanently safe position. This is one of the brutal truths of the AI era.