Bill Gates and his latest AI essay

Bill Gates and his latest AI essay

Billionaire philanthropist Bill Gates has waded into the artificial intelligence (AI) debate again, this time with a near-6,000-word essay on the transition to the AI era, describing it as one of the most turbulent periods in human history, and warning, “AI is improving faster than anyone expected…and could begin to act against our interests and we could lose control.”

While AI carries enormous potential to improve lives, Gates says the world is currently underprepared for the speed with which it will impact us socially, politically, and economically.

In his latest essay published on his website GatesNotes.com, Gates writes, “The transition to the AI era will be one of the most turbulent times in human history. Right now, we are not preparing adequately for that transition,” adding, “in terms of equity, AI will either be the greatest equalizer ever invented, or the worst source of injustice.”

Reflecting on his life spent developing software at Microsoft and directing his wealth through the Gates Foundation to tackle global inequality, Gates argues that ensuring AI leaves everyone better off has to become the world’s top priority.

Gates offers several reasons why so many people underestimate the speed and magnitude of the AI disruption.

He suggests that unlike the arrival of the personal computer, which took two decades to transform work because software had to be written and hardware prices had to fall, artificial intelligence runs on existing hardware and uses natural language.

“We don’t have to adapt to it because it can adapt to us,” Gates explains, noting that models can learn directly from human training materials.

Job losses

Furthermore, while past shifts moved workers from agriculture to office work over several generations, AI “can substitute for human cognition” and will impact law, customer service, medicine, software, and manufacturing within a single decade.

On that latter point, Gates’s forecast mostly concurs with those of other experts and founders. Whether this consensus is the result of independent investigation or the product of an echo chamber we cannot know.

Gates suggests the pace of the shift brings profound economic risks. He points out that entry- and mid-level roles are most vulnerable, warning, “the new jobs being created will mostly require skills that take many years to learn.” Meanwhile, the disruption won’t stop at white-collar offices. As dexterous robotics advance in countries like China, smart robots will begin competing for physical tasks in construction and hospitality by the end of the decade.

The combination threatens to create a vicious competitive cycle where market forces compel businesses to automate rapidly. Gates expresses particular concern for younger generations entering a shrinking entry-level market, warning that when AI delivers nearly error-free work, companies will have every economic incentive to operate autonomously. “In a capitalist society, employment is the way most people get the money they need to pay for the basics of life as well as being a key source of dignity and social connection,” he writes, urging immediate policy intervention before displacement triggers wider economic and social damage.

This is something of a repeat of his Ask Me Anything (AMA) appearance on Reddit, the online discussion platform, in February 2017.

Back then, Gates introduced the concept of a Universal Basic Income (UBI), stating that it was “too early” for a universal basic income because countries were not yet wealthy enough to support systems where large numbers of people do not work.

He also argued that there was still critical human-centric work to be done, such as caring for the elderly, assisting children with special needs, and supporting education, but proposed taxing companies for using robots and automation to replace human labour – similar to how human wages are taxed – to help slow down the displacement of workers and fund human-focused jobs.

Beyond jobs

Beyond workforce issues, today’s essay outlines severe security and developmental hazards. Gates warns that “even criminals with very limited skills will be able to target victims at every scale,” using AI to lower the cost of cyberattacks on critical infrastructure like hospitals, power grids, and water systems.

The dual-use potential of AI introduces risks in areas like biological engineering, autonomous weaponry, and mass influence over the public. Psychologically, Gates voiced concern about AI companions, describing them as a “protected greenhouse” that prevents young people from experiencing minor risks necessary to develop real-world resilience. Additionally, overdependence on AI in education risks undermining critical thinking skills at a time when misinformation and deepfakes make it increasingly vital to differentiate truth from lies.

Beyond the risks

Despite the warnings, Gates argues against looking exclusively at the dangers, emphasising that “we need both: deep concern about the AI harms we need to minimize, and grounded optimism about the positives if we maximize them for everyone.”

For example, in healthcare, AI can assist primary-care doctors with complex diagnoses as well as help small hospitals detect emergencies like strokes faster.

In low-income nations, agriculture stands to see the fastest positive impact, enabling smallholder farmers to receive better advice on seeds, weather, and soil than even the wealthiest farmers get today.

AI can also streamline government bureaucracies to deliver safety-net services faster, assist mental health professionals, and support education by preserving the “productive struggle” required for students to construct deep understanding.

What needs to be done?

Gates suggests navigating this era safely means expecting that private technology companies are unlikely to lead the charge on regulatory solutions.

Instead, answers must emerge through democratic processes, and he outlines three proposals to begin managing the transition.

First, the world has to build entirely new domestic and international systems of governance. Because AI impacts national security, labour, taxation, public health, energy, and education simultaneously, existing bureaucracies are ill-equipped to oversee it. “Left to themselves, institutions will see only one part of the system, while the consequences of AI will ripple across the entire system.”

Domestically, governments need bodies that coordinate across agencies so risks do not slip through institutional cracks. Internationally, countries will have to construct a global framework that draws on elements from nuclear inspection regimes, international aviation regulations, and environmental agreements to enforce shared safety standards before competitive pressures make global cooperation impossible.

Second, Gates introduces the concept of creating “Human Reserved” domains -deliberately designating specific roles strictly for human beings. Drawing an analogy to nature reserves where development is prohibited because the loss would be too great, he suggests preserving human labour in fields driven by deep empathy, such as elder care, specialised medical communication, and core teaching.

In the essay, Gates shared a personal memory of the caregivers who attended to his father while battling Alzheimer’s disease; “something in the care they gave my dad was irreplaceably human. No robot could or should have done it.”

In other words, reserving domains for humans preserves what he describes as essential human connection while offering a way to phase in AI gradually and protect workers who can’t be easily retrained.

Third, governments will have to rethink how labour and capital are taxed. As automation shifts people out of traditional employment, income tax revenues will drop just as demand for social safety nets and worker retraining programs reaches an all-time high.

We should be worried

If Gates’ prediction about the need for a UBI comes to pass, we should be worried about the solutions proposed to fund it.

As he alluded to in 2017, Gates argues that “we should tax AI tokens and robots” to generate the funds needed to support displaced workers, maintain public services, and ensure that the immense wealth generated by artificial intelligence is distributed broadly across society rather than concentrated among a privileged few.

This proposal, of course, echoes those of Sam Altman and Elon Musk, neither of whom suggests they should give up or share ownership and control of their AI tools.

As an aside, there’s something I find disturbing about listening to tech billionaires proselytise about how the population will need financial help, while never offering to cede their own financially elevated status, and ideating solutions that ensure the population remains dependent on them.

Rather than presenting AI as an inevitable disaster or a guaranteed utopia, the essay presents the AI transition as a challenge for governance and regulation and proposes establishing international safety institutions that protect irreplaceable human roles, and reform today’s tax systems.  Only then can society harness this “unprecedented” technology to build a safer and more equitable future.

What does this mean for investors?

For investors, AI is likely to create significant opportunities, but not every company exposed to AI will be a winner.

Some companies will use it to improve productivity and strengthen their competitive position, while others may be disrupted by it or struggle to earn an adequate return on the capital invested. The challenge will be identifying businesses that can translate AI into genuine productivity and earnings growth, while ensuring the right price is paid for that growth. Ultimately, however, consumers could be the biggest beneficiaries as AI becomes cheaper, more capable and more widely available. 

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Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

He is also author of best-selling investment guide-book for the stock market, Value.able – how to value the best stocks and buy them for less than they are worth.

Roger appears regularly on television and radio, and in the press, including ABC radio and TV, The Australian and Ausbiz. View upcoming media appearances. 

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