Jevons Paradox is a 19th-century economic theory that has gained relevance in today's discussions about artificial intelligence (AI). Formulated by economist William Stanley Jevons, the theory suggests that as the efficiency of a resource increases, its consumption does not necessarily decrease, but rather, the demand for that resource can actually increase.
Although it originally referred to coal consumption, Jevons' paradox applies perfectly to the world of technology. In the case of AI, recent advances in energy efficiency and algorithms have made AI models more accessible and cost-effective. Companies like DeepSeek have developed more efficient AI solutions, making them more affordable compared to giants like OpenAI.
Initially, one might think these advances would reduce the need for specialized chips like those made by Nvidia. However, Jevons’ Paradox suggests the opposite. As AI becomes more efficient and affordable, it is likely to increase the demand for these chips, since businesses and consumers will be able to use the technology more broadly. This could lead to a massive increase in semiconductor demand, rather than a reduction.
Microsoft CEO, Satya Nadella, recently pointed out that Jevons' paradox "manifests itself again," referring to how advancements in AI could turn this technology into a "commodity" available to a larger number of businesses and consumers. This would open the door for AI to be implemented in areas like automation, healthcare, and finance, further driving the demand for technological infrastructure.
However, this scenario is not without uncertainty. The emergence of more efficient companies like DeepSeek has raised questions about Nvidia’s dominance in the semiconductor market for AI. If competitors manage to maintain their advantages, they could affect Nvidia’s profit margins and limit market growth in the short term. Tech giants like Microsoft, Meta, and Amazon will need to adapt quickly to stay competitive.
In conclusion, Jevons' Paradox shows that advances in AI efficiency will not necessarily lead to less technology usage but rather greater demand. This phenomenon could further transform the semiconductor industry, increasing competition and creating new opportunities in the world of artificial intelligence. Expansión. (2025, enero 29). Qué es la paradoja de Jevons y así la usan los analistas para rescatar a Nvidia en Bolsa. Recuperado de https://www.expansion.com/mercados/2025/01/29/679a5e0ee5fdeaa57a8b4584.html.