AI, Big tech, and the labor market: embrace the change or be left behind
By: Juan Carlos Garnica
Empowering Real Estate & Infrastructure Investments. Expert Strategies for Global Opportunities & Sustainable Growth
Apropos of the letter by Musk and 1000 other tech leaders to pause AI development: A turning point or just a speed bump?
Excitement and concern are what AI is generating in the tech industry, and the labor market, and by far, these two emotions do not synthesize what can really happen in a short time.
Tech Industry has Second Thoughts about Their own creation?
On one side, a challenging letter published by the Future of Life Institute exemplifies the concerns about AI's disruptive incursion into many industries, stating that "a technology that no one, not even its creators, can understand, predict, or reliably control" is among the issues. The letter was signed by personalities such as the controversial Elon Musk, the MIT professor of physics and machine learning Max Tegmark, and Apple's co-founder Steve Wozniak, among others. They called for a six-month pause on AI development and urged the creation of shared safety protocols audited by independent experts.
On the opposite side of the debate, just last week at Microsoft headquarters, there was a palpable sense of excitement when people noticed that AI generated summary notes from a typical meeting with more detail and accuracy than ever before; the group of analysts and engineers in the productivity software team at Microsoft was also thrilled to announce that all of their productivity software will now be powered by AI. Similar announcements have been made by other US tech giants as well: AWS is expanding its partnership with Hugging Face, another AI startup; Apple has announced that it's already testing AI in all of its products; META's CEO has promised that all of their products will be turbocharged by AI; and Google, the dominant force in the search industry, has launched its own AI chatbot called Bard to compete with ChatGPT.
This Change Started a While Ago!
Given that AI will be a game changer for tech companies overall, it is clear that the race for AI is heating up and changing the way big tech deploys technology. However, this is not a new trend. AI has been present for at least eight years now, driving giant tech companies in many ways. For example, Apple has been utilizing Siri capabilities, Amazon has been optimizing how they sell and deliver their products, and Microsoft has been helping clients maximize their data and time management.
What sets generative AI models apart, such as GPT-4, is their large language models, which enable the creation of all kinds of software applications. This is evident in the impressive reception of OpenAI's GPT-4, with the company reaching one billion visitors and an estimated one hundred million free subscribers, breaking all-time records.
Many would say that with data, computing power, and billions of users, tech giants have everything they need to thrive in the age of AI, and it is true, but the titans are looking for dominance, which has been one of the reasons why the investment in R&D compound annual growth rate has
surpassed 26% in recent years, from $109 billion in 2019 to $223 billion in 2022. In April 2023, Alphabet will make public how much they have spent on AI; for now, we know that the still search engine leader has published about 9000 AI papers, more than anybody else, followed by Microsoft with 8000 AI papers and Meta with 4000.
Other AI onboarding strategies have been through the acquisition of AI firms, and venture-capital and private-equity investments; in this endeavor, Apple, with 45% of M&A expenses, and Microsoft, with 35% of the number of deals, lead the race in both strategies, respectively. Meta and Amazon also play important roles in this battle.
Where Are We Going with This New Creation?
New times call for new needs, and new skills, which is the reason why big tech is ramping up to hire new AI talent. Still, at the same time, AI will be a huge disrupter in the labor market, according to Goldman Sachs, exposing the equivalent of 300 million full-time workers across big economies; the OpenAI team calculated that at least 10% of the 80% of the workforce would be impacted in US and EU market in the next years, many researchers believe that it could happen in three years; yes, just in three years!
Advanced economies’ governments are attempting to establish a framework to manage and assess the impact of AI. Next week, the UK plans to request current regulators to formulate a consistent strategy for implementing AI in their respective industries, without offering new funding or additional powers at this stage. Meanwhile, the EU is developing its own regulations to govern the use of AI in Europe, which could include fines of up to $30 million or 6% of global annual turnover.
Undoubtedly, many sectors will be disrupted, from writers and editors to coders and designers. Just recently, Nvidia’s CEO declared, “Every single pixel will be generated soon. Not rendered: generated,” highlighting the profound impact of AI on the creative industries. However, it's essential to note that the most efficient and accurate results from Chat GPT can be obtained not by relying solely on the algorithm to think for you but by utilizing it to execute tasks under your command, making the human-AI partnership a critical aspect of the future of work.
Staying relevant in the AI age: Skills to help you succeed and thrive.
It's clear that some skills will be more necessary in this new era of AI, from programming skills to math skills and statistics, and more. It is also clear that in terms of machine learning, it will take more time for machines to absorb the capabilities of human emotional intelligence, which includes critical thinking, problem-solving, communication, and collaboration. These are some of the skills that will determine whether you are promoted or replaced.