The much-touted AI takeover of the U.S. job market is likely overblown and will hurt the bottom lines of overzealous companies that have invested billions in the technology, according to a prominent expert. It is said that there is a possibility.
Economist and Massachusetts Institute of Technology professor Daron Acemoglu calculates that within the next 10 years, just 5% of jobs will be replaced or significantly assisted by artificial intelligence.
“A lot of money will be wasted,” Acemoglu said in an interview. with bloomberg. “There will be no economic revolution from that 5%.”
Major companies have spent billions in recent years pursuing advanced AI models.
In the second quarter of this year alone, Microsoft, Alphabet, Amazon, and Metaplatforms collectively spent more than $50 billion in capital spending, much of it for AI, according to Bloomberg data.
This spending frenzy pushed ChatGPT developer OpenAI's valuation to a whopping $157 billion in a round that closed Wednesday — even as the company is bleeding cash. Rival company xAI, founded by Elon Musk, is already valued at $24 billion after being founded just over a year ago.
Acemoglu argues that current AI systems are still too unreliable to be immediately used to replace humans in white-collar office jobs or blue-collar jobs such as construction.
“We need reliable information or the ability of these models to faithfully perform certain steps that previous workers were doing,” Acemoglu told the outlet.
“If you have human oversight, you can do that in some places, but you don't have that in most places.”
If unchecked spending continues, the technology could lose support from executives and ultimately cause a tech stock crash (what Acemoglu calls an “AI winter”).
Acemoglu also outlined more troubling possibilities. Companies may spend large sums of money developing AI technology, cut jobs in the hopes that demand for labor will fall, and then reverse course later.
“Currently, the negative impact is spreading throughout the economy,” he said.
The Massachusetts Institute of Technology professor is one of several experts who have predicted that an AI bubble will disrupt markets in the near future.
In August, investor and strategist David Roche told CNBC that he expected the economy to enter a bear market in 2025.
He likened the growing hype around AI to the dot-com bubble of the early 2000s.
