A never-ending arms race in AI agents is reshaping markets and cybersecurity. From Meta's Muse finding deals to sellers using AI to extract maximum prices, buyers and sellers are deploying bots to outmaneuver each other on price. This creates a potential Jevons paradox of administrative busywork, where efficiency gains increase total consumption of resources.
For example, an insurance company uses AI to reject claims, the insured uses AI to dispute, and the insurer's bot handles the dispute—an endless loop. Similarly, AI recently discovered a vulnerability in PHP affecting 70% of websites, triggering a scramble to patch before attackers exploit it. As AI diffuses throughout the economy, bots may be caught in endless loops of disputes over shopping, bureaucracy, or cybersecurity.
Ultimately, we may see more machines doing the same work with more money spent, creating an 'Infinite Work Machine' where agents continuously compete to find and fix vulnerabilities, or to find the best price while preserving pricing power.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing