AI: Efficiency or a New Consumption Boom? 🤖💡

Satya Nadella, CEO of Microsoft, recently highlighted the Jevons Paradox — an economic principle that suggests increased efficiency in resource use often leads to greater overall consumption. In the AI sector, this paradox is becoming more relevant than ever.

Take the example of the Chinese startup DeepSeek, whose R1 model is cheaper, faster, and more energy-efficient than its competitors. At first glance, this democratizes access to AI. But following the paradox, the result could be a massive surge in AI usage, leading to higher energy and resource consumption. Instead of conserving, we may face even greater strain on infrastructure and the environment.

Why does this matter? Because AI is rapidly becoming essential across all industries — from healthcare to entertainment. Yet, greater accessibility can bring unintended consequences: from uncontrolled adoption to market disruptions caused by revaluations of industry leaders.

DeepSeek has already shaken the market: Nvidia’s stock is plummeting, and competitors are scrambling to adjust strategies. Nadella emphasizes that the future of AI isn’t just about innovation but also finding sustainable solutions.

What we’re witnessing isn’t just technological progress but an existential challenge for the entire AI industry. The real question isn’t whether we can make AI accessible to everyone — it’s what cost we’ll pay to achieve it.