Hey Siri, Are You My Friend or Foe?

Hey Siri, Are You My Friend or Foe?

I am a 16-year-old high school student who aspires to be an entrepreneur in future. My father always told me that one of the most satisfying aspects of being an entrepreneur is the ability to provide employment opportunity to people around you and contribute to nation's growth. So, job creation has been one of the major driving forces at the back of mind. But a recent news article caught my attention - How ChatGPT brought down an online education giant. Chegg's (an online go-to source for students who wanted help with their homework) stock dropped 99% as students prefer Artificial Intelligence (AI) now. Reading this and some other articles on how AI is slowly taking over jobs is really unnerving. While some companies are using AI to enhance productivity and create new opportunities, others are replacing human labour with automated systems. The rapid use of AI tools like ChatGPT, which is now used by 65% of businesses according to recent research, has already led to a wave of layoffs. 

Goldman Sachs has projected that AI could eliminate up to a quarter of all current work tasks in the United States and Europe, potentially putting tens of millions of jobs at risk.

Some Big Companies replacing or planning to replace workers with AI - 

1. MSN: The U.S. web portal MSN was one of the first to replace workers with AI. Since 2020, MSN has used AI to generate news content, resulting in the layoff of dozens of journalists.

2. IBM: IBM has announced plans to gradually replace 30% of its back-office roles with AI over the next five years, affecting approximately 7,800 positions. The company has already slowed hiring for certain clerical roles, with more significant changes anticipated in the next decade.

3. BT Group: The British telecommunications company BT intends to cut around 55,000 jobs by 2030, replacing about 10,000 of these with AI-driven solutions. While the company assures that not all customer service roles will be automated, AI will play a significant role in the future workforce.

4. Dell: US technology group Dell has announced its latest round of layoffs to streamline sales and marketing efforts and sharpen its focus on AI products and services. The company is reportedly letting go of as many as 12,500 employees, or about 10% of its global workforce, including seasoned team members.

5. Microsoft: In January, Microsoft announced plans to lay off 10,000 employees as part of broader cost-cutting measures while simultaneously making a “multibillion-dollar” investment in OpenAI, the company behind ChatGPT. 

6. Meta: Meta’s CEO Mark Zuckerberg announced plans to lay off another 10,000 workers in March, while also outlining plans for heavy investment in AI.

7. Google: At Google's third quarter earnings call, company CEO Sundar Pichai rang alarms for software engineers and coders saying that over 25% of Google's software is now written by AI. Though he said that engineers now have a different role but it raises concerns about the future of entry-level and routine coding positions. 

This trend is not limited to tech giants but is also evident in traditional industries that are integrating AI into their operations.

Many researchers say that the widespread use of AI will create new jobs and make workers more productive, but these changes will come with a cost. Most of these new job creations will happen in the technology field and increase the demand for professionals with skills in robotics, engineering, data analysis, IT and other AI-relevant skills. This means there will be a notable shift towards a more educated workforce, with a greater emphasis on STEM degrees and IT skills to fill critical AI jobs. This is a good thing. But then what will happen to the people who do not have the resources to be able to get the required education and training? They will be left behind and this will only deepen the existing inequality. AI could lead to income and wealth inequality not only within countries but also among countries. 

As per a Staff Discussion Notes done by IMF staff, almost 40% of global employment is exposed to AI. Interestingly, it says that AI has the ability to impact high-skilled jobs. A recent article in the Harvard Business Review suggests that while AI may not cause long-term macro-level unemployment, it is likely to lead to significant short-term job losses, particularly in white-collar professions that were once considered secure. According to the IMF staff, advanced economies face greater risks from AI—but also more opportunities to leverage its benefits—compared with emerging market and developing economies. In advanced economies, about 60% of jobs may be impacted by AI. Roughly half the exposed jobs may benefit from AI integration, enhancing productivity. For the other half, AI applications may execute key tasks currently performed by humans, which could lower labour demand, leading to lower wages and reduced hiring. In the most extreme cases, some of these jobs may disappear. In emerging markets and low-income countries, by contrast, AI exposure is expected to be 40% and 26%, respectively. These findings suggest emerging market and developing economies face fewer immediate disruptions from AI. At the same time, many of these countries don’t have the infrastructure or skilled workforces to harness the benefits of AI, raising the risk that over time the technology could worsen inequality among nations.

We are on the brink of a technological revolution and this trend is likely to persist, raising questions about the future of work and the role of human workers in an increasingly automated world. No doubt, it could improve productivity, boost global growth and raise incomes around the world. Yet it could also replace jobs and deepen inequality. We need a careful balance of policies by governments and companies to tap the vast potential of AI for the benefit of humanity.

So, coming back to the topic of my blog – ‘Hey Siri, are you my friend or foe’, the answer would very much depend on where I am coming from?