Jevons’ paradox was developed in the 1800’s to explain dynamics in the coal market. Jevons found that technological improvements can increase resource efficiency, but that will often lead to an increase in total resource consumption. The increase in efficiency leads to lower effective cost, and with costs lower, demand will increase.
We see this effect across many industries undergoing technological improvements, but it may be best exemplified by the AI market, where efficiency keeps improving while demand still grows. The electricity demand will increase. The demand for chips will increase. The demand for data will increase. Yes, there is efficiency, yet consumption of the core product and associated supplies will also increase.
There is nothing special about the AI industry. It is following the same behavior we have seen countless times over centuries.
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