The Synthetic Shift: How AI and Robotics Are Rewiring the Emerging Silicon Economy

By H. Bruce May, October 25, 2025

(As posted on LinkedIn)

We are moving from a labor-based economy to an innovation economy where corporations receive government funding based on the amount and quality of the services they provide, to other businesses, to the government, and to citizens who have been removed from the synthetic labor pool.

Introduction

We are not merely automating tasks; we  are automating the very concept of labor. As AI and robotics scale across industries, they are not just replacing jobs; they are dissolving the foundational assumptions of the labor-based economy. This article explores how synthetic labor triggers the reconfiguration of value creation, distribution, and participation. This transformation will be driven by three key areas that can be described by their functional role in the new Synthetic Economy: a Corporate Incentive Map, an AI Wealth Redistribution Loop, and a Citizen Access Grid.

From Labor Scarcity to Synthetic Abundance

Traditional economies are built on human labor as a scarce resource. AI and robotics introduce a new class of agents, synthetic laborers, that operate at scale, 24/7, without wages. This abundance challenges the wage-based distribution of income and demands new models of economic inclusion.

The Collapse of the Work-Income Link

As more tasks become automatable, the link between work and income weakens. This creates a paradox: productivity rises, but purchasing power may fall unless redistribution mechanisms evolve. Enter the need for frameworks like the Corporate Incentive Map, AI Wealth Redistribution Loop and the Citizen Access Grid.

Corporate Incentive Map

Corporate Incentives in a Post-Labor World

The Corporate Inceptive Map aligns corporate behavior (creating highly productive products and services using AI and robotics) with societal outcomes across key areas, including housing, food, health, learning, and even self-expression.  These ideas, and even a corporate incentive map, can help guide corporate and government leaders toward inclusive innovation, rather than the old model form the failing labor-based economy where wealth accumulates in corporations with few effective means for redistribution that is fair to all economic stakeholders in a capitalist economy.

This is being driven by the systemic risk we are facing today when companies benefit from synthetic labor, but without consumers who earn wages.  The economy will eventually collapse without balance between wealth creation and the labor-based income in the old economy that supports consumers, as human jobs rapidly disappear from the economy and demand stagnates. New incentive structures, such as taxation matrices tied to automation gains, can align corporate success with societal stability.

The Corporate Incentive Map becomes a new way of thinking about this economic shift from the old labor-based economy to one based on AI and robotic, or synthetic labor. The map  becomes a strategic tool for balancing innovation and inclusion. This will create a whole new Taxation Matrix, replacing the old matrix based on taxing labor income, which generated revenue from the weakest link in our consumer culture, the worker. This has been true even for six figure incomes, with many more households living paycheck to paycheck today than ever before.

The new Taxation Metric will tax productivity gains by corporations providing services sold to both private and public entities and to consumers, so on the surface, the structural components remain the same. But instead of taxing labor, government revenue will be generated by corporate productivity (fueled by AI and robotics)  and on services paid for by the government, across key sectors, including housing, food, health, and learning. This is not just another corporate tax, and it is not an expanded welfare system. Corporations will be taxed on gains created by automation. It will be known as an AI or robot corporate tax and those who are intellectually tied to old school economic ideas will protest too much. 

The reality of mass joblessness will demand that the government act in a bipartisan way to help move the country through this shift to our new Synthetic Economy. It will take strong leadership from both sides of the aisle and from the corporate world to avoid massive disruption to all our personal lives. This change has already begun and it will accelerate exponentially, requiring immediate attention on the part of all.

The new Taxation Matrix shifts the burden from labor to corporate profits, and the taxation must shift along with this. Tax revenues are shared back to corporations based on corporate success, just as with any capitalist economy.  Corporations will complain until they realize they benefit from incentives based on their success, measured in services delivered to other businesses, the government, and citizens who no longer are part of the old labor-based economy. It will not only be administered by the government, but by consumers who will have a combination of new sources of wealth, including both universal income payments based on their societal participation, and eligibility requirements based on need in the areas of housing, food, health, and learning. Income taxes will be replaced with corporate synthetic taxes, creating a wealth effect that transcends all income levels. The consumer will become increasingly wealthy through multiple revenue sources, and their choices will remain important in the new synthetic economy, just as in the old one.

AI Wealth Redistribution Loop

Redistributing AI profits has caught the attention of many thought leaders who see the Synthetic Economy on the horizon, but no one has envisioned the redistribution loop which is key to its success. TIME Magazine published a piece titled “A Blueprint for Redistributing AI’s Profits”  exploring how AI-driven productivity could be redistributed to prevent societal collapse (time.com). The AI Wealth Redistribution Loop will be driven by irresistible forces at work in our economy today, forcing both private and public sectors to cooperate to achieve a smooth transition.

Synthetic Labor Surge

The Synthetic Labor Surge is already pushing out jobs and an alarming rate, beginning with programmers who ironically, laid the groundwork for this transformation. Billions of AI agents and robots will perform tasks across industries, with AI already implemented in most business software solutions (including Facebook, Linkedin, Salesforce, Oracle, and many more). Tesla is about to unleash thousands of robots next year, with plans to scale this to millions.

The one overriding factor that makes this transformation inevitable is the productivity explosion that is already being adopted by corporations, driven by big business software providers. Manufacturing, logistics, services, and even creativity are scaling exponentially, reducing the need to hire new workers with the potential to reduce the human workforce by 80% or more.  If you doubt these predictions just watch any interview of Geoffery Hinton (“the Godfather of AI”), Eric Schmidt (former CEO of Google), Dr. Roman Yampolskiy, one of the world’s leading experts on AI safety, or Elon Musk.

Corporate Wealth Accumulation

Corporations are deploying synthetic labor this year at increasing rates, making 2025 in retrospect, the year of the AI explosion. Profits are already concentrating rapidly and will lead to the creation of multiple trillion-dollar businesses with minimal human employment. You can live in denial but just look at the  facts as reported by the companies themselves. The “Magnificent Seven” the  seven mega-cap tech stocks—Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms, and Tesla, are leading the charge but Oracle, Salesforce, and many more are leveraging AI. They all have AI integrated platforms or services that they are now selling and these all lead to productivity gains for the companies they serve. This wealth effect is positioned to grow exponentially, but it requires that we solve the consumer collapse through the AI Wealth Redistribution Loop.

Taxation of Machine Output

Taxation of Machine Output is inevitable because it offers the only means by which massive gains in productivity can be redistributed to a shrinking pool of labor, jobless employees who are part of the 80% of workers who will no longer be required in the Synthetic Economy. Governments will impose taxes on robot labor, AI-generated services, and synthetic productivity. New tax models  will emerge, including  per-task levies, algorithmic licensing, and output-based royalties which governments can use to fund the redistribution. Initially corporations will be resistant to these new taxes and the changes in the financial structure of our economy. Forget that they are responsible for creating the risk of imbalance that threatens our existing economy. Corporations will be the first to see the need to find a way to fund consumers’ wallets so they can participate in the Synthetic Economy along with B2C and government buyers.

Public Redistribution Channels

There are two ways to create redistribution channels to fund consumer needs. The first has been in place for decades but is struggling to survive primarily because our old, labor-based economy cannot generate enough revenue to fund these programs. The Synthetic Economy is the only way to save these traditional channels which include Medicare and Social Security along with various other social safety nets. The key difference between the Synthetic economy and the old economy will be universal service accounts that are managed based on need for core areas of need, including housing food, healthcare, and education, where citizens receive credits, not wages, allowing them to access services funded by machine productivity. These credits will be managed in real accounts, managed by blockchain technology, ensuring both their accuracy and reliability. These are important characteristics needed to create trust so that  citizens will feel comfortable relying on these accounts for their livelihood and financial security.

Corporate Competition for Public Contracts

Corporate Competition for Public Contracts is nothing new. The military-industrial complex has relied on these ever since WWII.  Now these basic financial relationships will be extended to individual citizens, providing the only solution that will solve the risks posed to our old economy by the massive disruption caused by AI and robotics. Companies will compete to deliver AI-powered services to citizens who will have a voice in determining the winners and losers, just as they have had  in our old economy. This is what distinguishes capitalism from communism, and it is the saving grace that will make the new Synthetic Economy thrive to a level that we cannot even imagine.  To help you think about what that would look like, just consider Elon Musk’s recent remark that the new economy driven by AI and robotics will be “hundreds, thousands, or even millions of times larger.” No one other than Musk is thinking in these terms, but Tesla is already planning on building millions of robots over the next few years.

Robots, powered by AI, either in a narrow form fit for a particular task, or tethered to super computers via the Internet, have been in factories for decades. They are just getting better, faster, and smarter at doing their jobs, and gobbling up skills formerly available only through human workers. That all changes overnight and it is already evening. The sun is setting on the old labor-based economy. Consumer demand for home-based robots will go through the roof. Before you complain that $20,000 (the suggested price point for a Tesla consumer robot) is too much for someone to buy their own personal robot, ask yourself, if a car is worth $50,000 - $60,000 or more, how many people do you think will buy a Tesla robot for $20,000? Soon people will be more attached to their personal robots than to their cars.

Corporate competition for government funding through social programs, combined with citizen wallets, funded by the government as it administrates the wealth created by the Synthetic Economy, is the driver for everything that comes next. The Synthetic Economy favors corporate innovation, and quality service, goals that are already at the center of everything leading corporations seek to achieve. There is no need to reinvent incentives based on bureaucratic  agendas. The incentives are already in place. It only requires a simple legislative act to implement the AI Redistribution Loop.

Citizen Access Grid

Rethinking Value: From Output to Access

In a synthetic economy, value is not just in what is produced, but in who has access to it. This reframes economic success from GDP growth to equitable participation in abundance. This is a radical way of understanding an economy, but it follows logically from first principles, as Elon Musk likes to say.  AI and robotics have both just crossed a threshold, the synthetic threshold that not only enables the Synthetic Economy, it requires it, for all the reasons already described, most especially the rapid growth in productivity and innovative new products that are irresistible not only to consumers, but to businesses, governments, and for special needs addressed by all the new products and services they enable (new cancer drugs, robotic surgery, brain/cyber interfaces, etc.) .

The Synthetic Economy is taking us to a place that we have always aspired to, where human needs for health, security, and basic needs, can be provided in abundance. There will be so much abundance we can’t even imagine the level of wealth that a Synthetic Economy can create. This is all driven by the cost of AI and robotic services, which will be continuously driven down by an endless supply of thought (AI) and labor (robots).  Services and experience will be the touchstone of the new Synthetic Economy, in contrast to the old labor-based consumer economy that could only be sustained by an endless need to buy more things.

We have already been living with the Synthetic Economy for years. It is in our smart phones, our business and personal apps, and in the many ways these tools have simplified our lives.  The next stage which has already begun, is moving us to an economy not measured on income or GDP, but measured instead based on quality of services, quality of life, and the freedom to live without selling your time as labor for the benefit of organizations that don’t benefit the worker accept through wages, which are increasingly insufficient to keep the old labor-based economy functioning.

Education, healthcare, and creative expression become core currencies of a thriving post-labor society. Basic necessities will be commonly delivered to everyone.  But what do individuals who could only survive by selling their labor do when their basic necessities are automatically fulfilled. Do we all become couch potatoes, watching mindless television shows or playing endless computer games? Some will, no doubt, but a full-time diet of these activities will be seen as ultimately boring and completely unfulfilling.

Humans will have a new freedom to travel, think, read, and create that we have never had before. That will be enough for some, but even this is not what is possible in a Synthetic Economy where the individual can focus on their personal or spiritual transformation.  Just as the printing press and the Internet both change the world forever, the Synthetic Economy will give the individual the freedom to do what ever they want, and most will discover that personal transformation can mean many different things to different people.

The one thing that increases in value in the Synthetic Economy is human engagement with other people. Mentoring and emotional support suddenly have new value never possible before. This can be done on a personal level naturally, without any organization. People will likely go through phases in their lives where they focus on others in unique ways, sometimes directly on their own, with family and friends, and sometimes  through various non-profits that create opportunities to give back to the community, and sometimes by working on their own or collaborative creative projects which they can still monetize just like in the old economy.

The difference is this is not labor out of necessity, but labor done out of love. The possibilities are endless and these too can be the source of financial credit deposited directly into volunteers’ crypto wallets. Imagine what you could do if you ran a non-profit and you had an endless supply of volunteers who were not paid for by you but were compensated for their participation in the Synthetic Economy through government managed credits, delivered simply by proof of participation.

Conclusion

The rise of AI and robotics is not the end of work. It is the beginning of a new economic story. One where synthetic labor liberates human potential, and where corporate innovation and  policy co-evolve to ensure that abundance is shared, not hoarded. This is an easy win-win. All it takes is recognition by the stakeholders, both private and public, that this is not only the solution to economic stagnation through massive job losses; it is the only solution.  This means the risk of not doing anything is the real risk.  It will take vision and leadership both from corporate leaders who are already seeing these changes taking  place and political leaders who are not yet informed about the dangers of doing nothing and the opportunity to solve serious problems that have plagued us forever.

This is part of a continuing dialogue about AI's impact on work and communities. Comments and submissions are welcome. Publication does not imply endorsement; it reflects ISD's commitment to dialogue and advancing understanding.