Artificial intelligence is colliding with capitalism in ways that the system cannot absorb. This is what Mo Gaudat told Business Insider’s Reem McCaul in a September interview.
Mr. Goudat, who spent decades working inside Big Tech, including senior executive roles at Microsoft and Google
“The very foundation of capitalism, the labor arbitrage of hiring people for $1 and selling what they earn for $2, will disappear,” he told Business Insider.
In Goudat’s view, AI does more than just automate tasks. It eliminates the need for human labor and ultimately eliminates the need for large-scale human decision-making.
When that happens, he says, the pillars that sustain capitalism – wages, employment and consumption – will begin to collapse. However, while the road ahead may be difficult, the final destination is one worth striving for.
Why AI will break old economic logic
A humanoid robot on display at the 2026 Tech & Fest festival in Grenoble, France. Romain Dusselin/Null Photography via Getty Images
Capitalism, Gawdat argues, is built on a simple idea. That is, they pay people less than what they produce, sell it at a higher price, and keep the difference. That model relies on human labor.
AI threatens that foundation.
The cost of making things continues to fall as machines take on more jobs. AI will bring production costs closer and closer to zero, says Goudat.
When that happens, familiar ideas about pricing, profits, and scarcity no longer work as they used to.
You can’t run an economy on productivity alone, he added. People cannot buy things unless they earn wages. And without buyers, the system becomes dysfunctional.
Unemployment is just the first shock
If consumption collapses, governments will need to rethink how money flows through society. Anna O/Getty Images
Goudat was candid about what happens next.
He expects a big wave of job losses across blue-collar and white-collar jobs. Lawyers, analysts, writers, executives, they’re all being exposed, he said.
“In your lifetime and mine, we are going to witness a period of 20%, 30%, 50% unemployment in certain sectors,” he said.
He is particularly skeptical of technology company leaders who frame AI-driven headcount reductions as a victory for efficiency. In the long term, AI systems will also emerge for them, he said.
“These CEOs forget that sooner or later they too will be replaced by AI,” he said, adding, “AI is better than humans at every job, including being a CEO.”
What happens when a capitalist system built around jobs suddenly loses jobs?
Without some form of guaranteed income, consumption will collapse. And if consumption collapses, capitalism will no longer be able to function. Governments will be forced to reconsider the flow of money in society.
“Without consumption, you can’t have an economy,” he said, adding, “So to keep the economy going you’re going to have to give people some income.”
He believes different regions will respond to this transition differently. Western economies, with their emphasis on productivity and individual output, are likely to suffer the most.
AI is not the enemy, he says
Despite the warnings, Goudat doesn’t think AI itself is dangerous.
He describes intelligence as neutral, that is, powerful but without direction in itself. The real risk, he says, is during a transition in which AI systems become highly capable but still respond to human incentives built around greed, competition, and power.
“The challenge facing humanity today is not the rise of AI, but the rise of AI at a time when humanity is at its lowest moral level,” he said.
Over time, Goudat believes machines will be able to make more rational decisions than today’s politicians and business leaders. That change, he argues, could ultimately create a system that is more fair than it currently is.
In his opinion, capitalism will not survive in its current form. But that doesn’t mean the future is bleak.
“This is an invitation to change,” he said. “And if you change, you will have an opportunity not only to survive, but to thrive.”
