We each have a magic genie that will do whatever we ask of it. So do we still need anything from other people? By the same logic, if everyone else has a magic genie that does whatever they want, why would anyone need something we make?

Another way of saying that is: if the magic genie makes creation abundant, what will become scarce and valuable?

Of course the magic genie is AI. The question of the hour is: if AI serves as a magical personal assistant, or a general partner, for any chore we choose, what happens to our old economic relationships?

The magic genie of AI may not be a “normal technology” (in the sense that Arvind Narayanan and Sayash Kapoor describe), but because it is real, it will have limits and costs. It will never be costless. Some chores will cost more than others; some will be easy for one AI and near impossible for another. Professionals don’t just do better work than amateurs; they are often 10 or 100 times faster. Magic genies will show the same spread. One might speed through task A but stall on task B, while another does the reverse.

So immediately, we might go to other genies because they have specialized in some dimension. They might be cheaper, faster, or smarter in some way. Our own genie will provide what we ask, but at a greater cost, or a longer time, or inferior quality. The giant brains in the sky that serve 8 billion people will deliver abundant content, and abundant sameness.

Difference becomes the valuable scarcity.

The value will lie in doing things in a way that the giant brain in the sky does not. As AIs become cheaper to train, they will become easier to personalize, and we could have 8 billion slightly different AIs. But cheap variation is not the same as valuable difference. Personalization alone will produce endless variety. What yields scarcity is a distinction worth paying attention to.

A more important reason to rely on other genies is to collaborate. As smart as an AI is, it will never be as smart as all AIs together. It’s not hard to imagine large, complex projects that require hundreds, if not millions, of AI genies working together to create something astounding. Some of those AIs may have bodies in the form of robots, but the necessity of collaboration is still present. Because AIs will be plural and differentiated, the collective of them offers abilities, skills, and powers not present in lone individual AIs. As is typical of hives, colonies, and swarms, new powers can emerge from them that are beyond the sum of the powers of their parts. This is another attribute that will differentiate AIs: some will be better at collaborating than others. That sociality will make them valuable. (See my essay “Swarm Intelligence.“)

Imagine two ace personal assistants. One is super dedicated to its boss; it is the boss’s exoself. It has been honed over decades to serve one person superbly, and nothing else. The other personal assistant has similar dedication to one boss, but also works super well with others, and is capable of collaborating with almost any other AI. The second is more valuable, because it can bring the abilities of every other genie to bear on its boss’s problems, not just its own. By dint of both training and experience, not all genies will be the same, so we should expect a market for genie skills to arise.

If value lies in genies that are different and that work well together, then whatever passes between them becomes the thing of value. So the next question is: how is a genie’s magic transferred? Do you just share the magic spell that releases the good stuff? Is the genie itself portable? What about the personal context that makes the work so valuable?

Tim O’Reilly hosts Foo Camp, where alpha geeks converge to regale each other with their latest insights. The most recent Foo Camp focused on AI, and at this meeting Tim asked the group a profound question: In an era of AI, what is the shareable artifact of knowledge? He followed up with an essay called “The New Knowledge Artifacts of the AI Economy.” It’s focused on software developers, but as Tim notes, everyone is now a software developer and has a stake in this question.

In the past, books were the primary unit of knowledge. When computers came along, knowledge was combined with action, and the shareable unit became software code. The web made the page and the link the unit, and for twenty years knowledge spread hyperlink by hyperlink. Code itself became shareable as packages and libraries that anyone could snap together. Later, mobile phones refined the knowledge unit into the “app.” Tremendous amounts of potential knowledge and action are compressed into a tiny app, which can be shared, bought, and sold.

Presently, it does not seem that all the knowledge value of AIs can be compressed into an app. As Tim points out, the code of an app is missing all the rich context that informs the actions an AI takes. Let’s say you ask your AI genie to create a program to track your medical records in real time, schedule regular tests, and coordinate with your human doctor. It then suggests courses of action that your medical team (doctor + AI) recommends. A friend of yours hears about how much you get out of it, and asks if you can share it with them. Handing over the text prompts to input into another AI does not capture all the power your genie provides you after years and years of training on your life. Perhaps all that context can be packaged up into a bundle with the prompts, but if you pass that bundle on, it omits the particular circumstances of your friend’s life. The same is true if you hand over the genie itself; since its weights are tuned to you: it fits your life, not theirs.

Now that prompting a genie in everyday language is so easy, what gets shared will be the specifications – the goals. The value is in getting the question right. The spec is like a consultation. Like a seed it grows differently in different soil. My friend’s genie holds a consultation about my friends goals, and from that conversation it grows its own prompts and then actions. At some point, a protocol will emerge that produces specs for genies in a uniform enough way that they can be shared widely across many different environments.

An adjacent challenge is how to engineer the shared artifact that passes from agent to agent. A growing share of the world’s financial transactions will soon be between one AI agent and another. My magic genie will be hiring your magic genie for certain tasks (because they are done either better or differently), and it is not clear yet what will be passed between them. Sometimes one agent can give a prompt, sometimes a prompt with all the background files, or it might need to deliver a bundle of prompts, plus files, plus context, plus specs. Someday entire models might be portable and you hand over weights. Other times, the deliverable might be simply an action: my genie confirms a delivery, and that triggers your genie to send the invoice. In all cases, the packaging of this “knowledge” will need to be routine and standardized. Early versions are already here, such as Anthropic’s Model Context Protocol, and Google’s Agent2Agent protocol. Also “skills,” which are folders of instructions and files an agent loads when needed. And because genies will be hiring strangers, these packages will also need to carry their provenance, so a genie can tell whether a bundle is good, safe, and from whom it claims. (See my Trust Quotient)

Standardization does not preclude difference and variety, which will become the precious scarcities. Standardization is what makes difference valuable. The standard 26 letters of the alphabet, and our standard dictionary of words, enable the value of weird arrangements of letters and words to be captured by anyone. Just as we humans can produce endless abundant strings of words, but only a few distinct ones are worth paying attention to, our magic genies will endlessly produce movies, software programs, simulations, entire worlds, and we all (agents too) will gravitate to those that are distinctive in some manner.

Which brings us back to the first question. We will still need other people in so far as they can lean into their particular life experiences, and together with their personal genie, generate distinctive magic.

The new artifacts of knowledge will succeed if they can carry those distinctions in a standardized way, the way 26 identical letters, the same for everyone, carry every distinct thing ever written.