As continue to invest heavily in (AI) amid concerns over widespread job losses, a new Goldman Sachs report argues that fears of an imminent “AI job apocalypse” are exaggerated. The report adds that while AI is expected to significantly reshape labour markets, it is unlikely to trigger the kind of collapse many predict over the coming decade.
Quoting the report titled An AI Job Apocalypse, news agency ANI reported that experts agree that AI could displace workers but may also generate new employment opportunities over time.
According to Joseph Briggs, a Senior Global Economist at in the US, over 9% of the labour force or roughly 15 million workers, could be displaced during a 10-year AI transition. However, Briggs believes that this disruption will be temporary.
He said, “Despite our expectation that AI-related will lead to a meaningful amount of labour displacement, we continue to expect that labour market headwinds will be temporary. Key to this view is our expectation that over the long run, AI will create many new jobs even as it destroys existing ones.”
Here’s what the Goldman Sachs report finds
A group of economists and experts believes that the effects of artificial intelligence are currently unevenly distributed across sectors. Economist Elsie Peng said that the technology is both replacing workers in some occupations while increasing productivity in others.
It further said that younger, less experienced could face greater near-term challenges, especially in AI-exposed white-collar professions. However, several economists also believe that there is little evidence to date that AI has significantly harmed the employment prospects of recent college graduates, despite their being more exposed to future disruption than many others.
The report comes days after Aswath Damodaran, a NYU Stern professor, predicted an upcoming AI correction.
Finance expert predicts AI correction
Damodaran, who is also widely known as the ‘Dean of Valuation’, explained in an interview with Excess Returns YouTube channel that the difference between the dot-com boom and bust and the AI boom.
The NYU professor said that while there is no certainty that the AI boom will end in a crash like the dot-com bust, historical trends suggest a market correction is likely.
According to the expert, “The dot-com boom and bust had no huge capital expenditure in that cycle. In fact, there was very little traditional CapEx, or even R&D, driving it. People started apps. They basically started going on it,” which is exactly how the dot-com crash was different from a potential AI crash.
He added, “This has been the biggest infrastructure run-up I think I’ve ever seen in business. You can go back and compare it to the automobile business 100 years ago. The amount of money that’s being put into AI CapEx is immense, which means that when the correction comes, the pain will be more intense.”
OpenAI CEO on AI job loss fears
Earlier this month, ‘s Chief Executive Officer (CEO) Sam Altman, in an interview with CNBC, backtracked on his earlier prediction that AI is causing widespread job losses. He argued that the companies making the greatest use of AI also tend to be expanding their workforce, while those attributing layoffs to the technology may not be adopting it extensively.
Addressing public anxiety over job losses due to AI, Altman expressed regret and said that some of OpenAI’s past press releases might have contributed to the anxiety. He also argued that human interaction will be central to how businesses and society function.
The OpenAI CEO added, “People really like other people and want to interact with other people. They want to collaborate. They work with other people.” He said, “When they buy a product, they want to talk to a person at the company.”