You're talking about normal technological developments that yes generally follow Econ 101 patterns. But AGI isn't like that. If AGI or something like it comes about it won't be a normal technology. The upside case for investors is that frontier models eliminate millions of jobs and remain controlled by a small group of owners. That's why they are investing sums unprecedented in human history. If all white collar work and an increasing amount of blue collar work is supplanted by AI how do those masses of newly unemployed folks make a living without wealth redistribution?

If AI capability plateaus and ends up as a normal technological development then I agree with you that it will mostly work out for the best. But that's not the scenario I'm worried about and plenty of folks in the industry are warning that's not the most likely path at this point.