A few weeks ago, I was asked a question on the Money Talks radio show.
It’s a question on a lot of minds: ‘Will AI lead to wholesale job losses?’
I’ve been thinking a lot about AI since Cathie Wood highlighted it during ARK Invest’s Big Ideas 2024.
ARK sees AI accelerating faster than forecast. They see it converging with other technology to define a new era of breakthroughs. But we’ll get on to that shortly.
In 2023, it was reported that 4,247 jobs were lost due to AI in the US. This is a tiny number compared to 233,448 lost to economic conditions.
While there have been predictions of mass job losses as generative AI grows, past experience shows that technological revolution creates new job opportunities. In the case of the internet, far more jobs have been created than lost.
Of course, jobs transition. New skills are required. There is no longer work for switchboard operators, but plenty for experienced software programmers.
It may well be that when you next go to see your lawyer for a legal opinion, they might have used AI to help draft that. Perhaps legal work will get faster. Perhaps they will upsell you on an AI-generated second opinion? But the work of talking a human problem through with someone you trust is a candidate for AI assistance, not AI replacement.
So, how will AI change industry? What opportunities does it present to increase your prosperity through a new technological age? And what threats and risks does it pose to your wealth?
With the sudden jump of Nvidia [NASDAQ:NVDA] earnings (and the stock price), it’s clear that AI represents a new industry. When investing, it’s important to beware of the early hype. Those who were investing right before the dotcom crash of 2000 will be acutely aware of the risk of bubbles.
Yes, in the 1990s, the internet was a new industry that promised exciting new business models. But it actually took over a decade for the best of these models to emerge and create phenomenal opportunities.
Let’s take a look at where the AI opportunity stands today.
(In Part One, we’ll examine some businesses that are set to be transformed by AI. And in Part Two next week, we’ll examine the companies designing and building the microchips to enable AI.)
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