Artificial intelligence systems will lead to layoffs, but traders say they will be fine
Feb. 6, 2023 Updated Mon., Feb. 6, 2023 at 9:16 a.m.
Advanced artificial intelligence systems are expected to eventually replace some jobs in the financial, media, legal and technology sectors, according to the latest MLIV Pulse survey.
What’s more striking: More than two-thirds of 292 respondents, predominantly in the financial sector, didn’t view their own jobs as being at risk any time soon.
Artificial intelligence has been in development for decades. But in recent months so-called generative AI – most notably OpenAI’s ChatGPT and DALL-E products – sparked widespread excitement among investors who believe it could also generate massive financial rewards.
MLIV Pulse survey participants were split almost evenly on whether these kinds of technologies were worth investing in.
Investors appeared to not use any kind of artificial intelligence, with only 12% saying they used one and just 27% saying they planned to. More than half of all respondents said they aren’t even considering using AI to help them invest.
This contrasts starkly with recent rallies seen in the market for companies connected to advanced AI, in part fueled by the widespread publicity of ChatGPT and Microsoft’s $10 billion investment in OpenAI, its developer.
Companies such as BuzzFeed, C3.ai, SoundHound AI, and BigBear.ai are among the stocks that have all seen massive jumps in volume, along with dizzying swings in their share prices.
Businesses and investors are in a race to become go-to names for technology that can create media such as text and pictures from simple prompts – or hold humanlike conversations on a wide variety of topics, from whether a cat would win a fight with an eagle, to practical considerations about world events or school projects.
Microsoft is up against the likes of Alphabet, Meta Platforms and Amazon.com in working to offer the smartest AI tools to the greatest number of people.
Still, the promise of tools like ChatGPT leaves room for some investors to desire, with only 49% of respondents saying they planned to buy stocks with exposure to such generative AI tools.
Overall, about 41% of all respondents said they intended to increase exposure to tech stocks more broadly, while 38% said they’d hold steady over the next six months.
This is despite their expectations for the Nasdaq 100, which closed on Friday at 12,573.36, to fall to 12,000 by the year-end, according to the median forecast.
It’s likely that investors are waiting on a final selling frenzy to buy.
Even before the current wave of interest in AI, the question of whether smart automation will create more opportunities than it displaces has been a topic of great interest to workers and businesses alike (not to mention the Pentagon and the U.K. government.)
Many of the companies now cutting jobs are also the ones investing billions in building their AI capabilities.
In January, Alphabet announced 12,000 job cuts globally while Chief Executive Officer Sundar Pichai singled out AI as a key investment area.
Similarly, Microsoft announced its $10 billion investment in OpenAI just days after saying it would lay off 10,000 employees. Neither company is unique in this regard.
Dell Technologies, facing plummeting demand for personal computers, said on Monday that it will eliminate about 6,650 jobs.
It appears that majority of investors surveyed by MLIV Pulse believe that those layoffs are too small or just right. Very few respondents, or about 11%, think those cuts are too big. Similarly, only 13% see them as premature.
“There are very interesting AI wars coming up between the tech companies,” University of Southampton Professor of Computer Science Wendy Hall told Bloomberg TV.
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