Impact of Generative AI on Jobs and Workers
By the Curmudgeon with Victor Sperandeo
As Generative Artificial Intelligence (AI) gains popularity and seems to be everywhere (see Generative AI Unicorns Rule the Startup Roost; OpenAI in the Spotlight), the perception is that it will make tech companies a boat load of money for many years.
While AI may help companies increase profits it might eliminate many jobs. It also could create new jobs. We’ll examine that theme in this article.
Impact of Generative AI:
More than 75% of companies are looking to adopt AI tech in the next five years, according to the Future of Jobs report from the World Economic Forum published in May, which surveyed 803 companies across the world.
AI innovators including OpenAI, the company behind the ChatGPT chatbot [see Q &A below], have been trying to walk a fine line on the impact of their technology on jobs and workers.
The building of AI robots or machines to do jobs humans now do is a threat to most people but could be a bonanza to business if it substantially lowers labor costs and increases profits.
Victor posits that AI is often confused with automation in terms of creating or eliminating jobs.
l Automation mostly created jobs in the past. For example, Henry Ford automated auto production using a moving assembly line in 1913 which resulted in many high paying jobs. “AI may entirely automate some jobs,” OpenAI Chief Executive Sam Altman told Congress in May.
l Generative AI is often associated with replacing human jobs with AI infused machines. A recent report by Goldman Sachs estimates that approximately 300 million global jobs could be exposed to automation, and one-fourth of all work could be replaced by generative artificial intelligence.
Jobs Gained or Loss due to Generative AI?
“Every large company has an army of people that read and review contracts for revenue recognition purposes, for example,” said Brad Lightcap, chief operating officer of OpenAI, at a Wall Street Journal event in Cannes, France. “You may not have that job. That may not be a job of the future,” he added.
Generative AI could potentially create some jobs as well as eliminate others. OpenAI’s Lightcap said that a company which uses AI to double the amount of computer code it writes will need more employees for other things. “There’s more people that need to be brought in to do product design,” Lightcap said. “There’s more people that need to be brought in to do distribution, operations, sales and marketing.”
Lightcap added that while AI models are good at jobs, they need to be told what tasks they should be doing, and their work must be checked and verified. “People will become more orchestrators,” he said.
Business Insider came up with 10 jobs that are at risk due to Generative AI:
l Software (Coders, computer programmers, software engineers, data analysts)
l Media jobs (advertising, content creation, technical writing, journalism)
l Legal industry jobs (paralegals, legal assistants)
l Market research analysts
l Finance jobs (Financial analysts, personal financial advisors)
l Wall Street jobs (Traders and investment bankers)
l Graphic designers
l Customer service agents
Reason Separates Humans from Machines:
Ayn Rand explained how humans absorb and use intelligence. Humans are unique in using “reason” as the means of survival and to solve problems. She said, “Reason integrates man’s perceptions by means of forming abstractions or conceptions, thus raising man’s knowledge from the perceptual level, which he shares with animals, to the conceptual level, which he alone can reach. The method which reason employs in this process is logic — and logic is the art of non-contradictory identification.”
Can Generative AI Machines Reason?
A Generative AI computer or machine cannot reason like a human being does. The content or output it produces is the result of training data — information provided to the model — which has been programmed. An example is conversational chatbots that depend on predefined responses.
Here’s what we got when we asked ChatGPT: “Can Generative AI machines reason?”
Generative AI machines, such as language models like myself, have the ability to generate new content based on patterns and examples they have learned from training data. While they can exhibit a level of sophisticated reasoning in their responses, it's important to note that they do not possess true understanding or consciousness.
Generative AI models like GPT-3.5, which powers me, operate based on statistical patterns in the data they were trained on. They excel at tasks like language generation, translation, summarization, and more. However, their reasoning abilities are limited to what they have learned from the data, and they lack a deep understanding of concepts or the ability to truly comprehend the meaning behind the information they generate.
While generative AI models can simulate reasoning to some extent by generating coherent and contextually relevant responses, they do not possess true understanding or the ability to think critically. They lack common sense knowledge and the ability to apply real-world experiences and judgment to their responses.
It's essential to keep in mind that generative AI models are tools designed to assist and augment human decision-making and creativity. They can be valuable in generating ideas, assisting with tasks, or providing information, but they do not reason or comprehend in the same way humans do.
ChatGPT “health warning” - “ChatGPT may produce inaccurate information about people, places, or facts.”
Cartoon of the Week:
Most jobs that are done via repetitive execution will be replaced by AI machines. However, jobs that require human reasoning will NOT be replaced with a Generative AI language model and training data.
“I haven’t seen a technology cycle yet in my career in which the
initial run-up isn’t more filled with hype and hope than the longer-term
prospects,” said Jason Pride, chief of investment strategy and research at
Glenmede, a Philadelphia-based wealth management firm.
Success, good luck and till next time……………………….
Follow the Curmudgeon on Twitter @ajwdct247
Curmudgeon is a retired investment professional. He has been involved in financial markets since 1968 (yes, he cut his teeth on the 1968-1974 bear market), became an SEC Registered Investment Advisor in 1995, and received the Chartered Financial Analyst designation from AIMR (now CFA Institute) in 1996. He managed hedged equity and alternative (non-correlated) investment accounts for clients from 1992-2005.
Victor Sperandeo is a historian, economist and financial innovator who has re-invented himself and the companies he's owned (since 1971) to profit in the ever changing and arcane world of markets, economies, and government policies. Victor started his Wall Street career in 1966 and began trading for a living in 1968. As President and CEO of Alpha Financial Technologies LLC, Sperandeo oversees the firm's research and development platform, which is used to create innovative solutions for different futures markets, risk parameters and other factors.
Copyright © 2023 by the Curmudgeon and Marc Sexton. All rights reserved.
Readers are PROHIBITED from duplicating, copying, or reproducing article(s) written by The Curmudgeon and Victor Sperandeo without providing the URL of the original posted article(s).