Whenever revolutionary technology emerges, people don't always think about the benefits it could bring. For some, the first concern is the risk of losing their jobs. This has happened before with telephone operators, vacuum tube technicians, telegraph workers, and many others.
However, while these technologies eliminated certain jobs, they also tended to create new ones. The main challenge was that those who lost their jobs often had to retrain and acquire new skills. Even so, never in history has a new technology caused a sudden and massive increase in unemployment.
Could it be different this time?
According to labor research company Revelio Labs, job openings for entry-level positions in the United States have fallen by approximately 35% since January 2023. Job losses among young people aged 16 to 24 are also rising. Even the big four companies are starting to replace graduates with AI.
Programming and software development, customer service, content marketing, copywriting, and basic data analysis have been the areas most affected by AI development so far. People are not being laid off en masse, but hiring for vacant positions has fallen sharply in recent years.
It is not yet a catastrophe, but governments are already discussing protective measures. Among the ideas being considered are the introduction of an AI tax and penalties for companies that replace workers with AI, possibly through compensation payments to displaced employees.
But how does AI work at the corporate level?
Goldman Sachs calculated that in the second quarter, a record 58% of S&P 500 companies, including giants such as Amazon, Microsoft, and Meta, mentioned AI in their earnings reports. As the earnings calendar continues to fill with new releases, the pattern is becoming more visible: firms consistently highlight AI. However, according to MIT, 95% of companies that invest in AI see no return, which in practice means a loss of money.
Not even OpenAI, creator of the popular ChatGPT, is turning a profit. On the contrary, the company has dramatically increased its cash burn forecast through 2029 to $115 billion as it expands its infrastructure. It is still unclear when, or if, the finances will turn positive, so investors should keep this in mind.
So, should workers fear for their jobs and investors for their money?
For employees, AI is more likely to become just another tool in the workplace, similar to how Excel transformed accounting. Learning to use AI as an assistant, not a replacement is key. Machines may be smarter than us in most aspects, but they still need supervision, just as autopiloted planes still need pilots.
Companies will win if they discover the most effective applications for AI, such as self-driving cars, AI-powered drones, and much more. Until then, the biggest beneficiaries will be the companies selling the “shovels” for this new gold rush, especially chip manufacturers like Nvidia.