Suppose the IRS requires 100 pages of paperwork per employee. This used to take 10 hours. Now with GPT-4, as a thought experiment, let’s say it takes 1 hour.

The long run result might be 500 pages of more complicated paperwork that takes 10 hours even with GPT-4, while accomplishing nothing. That still will take time. It is not so easy or fast to come up with 400 more pages. I’d assume that would take at least a decade.

Would human effort really go up in this scenario? Why would the humans be needed to help with the paperwork? It would just require more effort by AI to complete.

I think the best returns you can make on transformative AI are call options on AI companies. I think the market is underpricing these in general. Particularly, I think that there will be events where the market starts recognizing AI into their valuation of companies and their stocks go up a lot in a very short period of time.

Even for financial speculation, this is possible. For example, after Black Thursday, the bankers bought lots of stock to increase the price because they wanted to avoid a larger crash that affected their companies predicting other people would follow suit if they made the "prediction" that the market would go back up.

Reference: https://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929#:~:text=Whitney%20placed%20a%20bid%20to%20purchase%2025%2C000%20shares%20of%20U.S.%20Steel%20at%20%24205%20per%20share%2C%20a%20price%20well%20above%20the%20current%20market.