In a conversation with investor Nikhil Kamath, released on November 30, Elon Musk said U.S. public debt has reached “insane” levels. He noted that interest payments have already surpassed America’s military budget and are expected to continue rising in the short term.
According to estimates from the U.S. Treasury, national debt reached USD 38.34 trillion as of November 26, more than double what it was a decade ago. Musk said the development of artificial intelligence (AI) and robotics is “almost the only way for the U.S. to escape the current debt crisis.”
Musk explained that inflation or deflation essentially reflects the ratio between the amount of goods and services produced and changes in the money supply. He argued that once AI and robots are deployed on a large scale, they will trigger a massive surge in output, which could then lead to deflation.
Although he acknowledged that AI has not yet advanced enough to push economic output beyond the current rate of inflation, the billionaire predicted that this will change rapidly within the next three years. “You simply cannot increase the money supply as fast as the growth in goods and services,” Musk said.
Musk added that within the next 20 years, humans may no longer need to work. He described this as a state of “universal high income,” a world where productivity is so high that goods become abundant enough to meet all basic needs.
At recent events, Musk also claimed Tesla’s Optimus robot could become a tool to eliminate poverty and could eventually make the concept of money “obsolete.” Investor Vinod Khosla believes AI will take over 80% of the work in 80% of future industries. To prevent social inequality, he said governments will need to implement Universal Basic Income (UBI). Google CEO Sundar Pichai has also warned of significant social disruption and the need for adaptation, while acknowledging AI’s enormous benefits.
However, not everyone is optimistic. Geoffrey Hinton, known as the “Godfather of AI,” worries about the unequal distribution of benefits. He argues that although AI will generate enormous profits, most of the wealth will flow into the hands of a small group, making “the rich even richer and the poor even poorer,” and potentially causing mass unemployment.