Goldman Sachs report says AI could put 300 million jobs at risk

Goldman Sachs economists released a report today that suggests generative artificial intelligence will significantly disrupt the global labor market, automating about 300 million jobs over the next decade.

In the midst of what is now a generative AI boom – something that should be put on pause according to some leaders and thinkers today – the investment bank warns as AI becomes “indistinguishable from human-created output,” there will be “potentially large macroeconomic effects.”

The researchers say a quarter of all work may be automated in the U.S. and Europe, which will lead to a profound displacement of workers, although the good news is that new jobs will be created. A “productivity boom,” says the bank, may raise economic growth globally.

“The boost to global labor productivity could also be economically significant, and we estimate that AI could eventually increase annual global GDP by 7%,” said the report. “Although the impact of AI will ultimately depend on its capability and adoption timeline, this estimate highlights the enormous economic potential of generative AI if it delivers on its promise.”

The AI models the researchers had in mind when writing the report included Google LLC’s LaMDA, also known as Language Model for Dialogue Applications. It’s perhaps best-known for the time a Google engineer was suspended for stating it was sentient. The others were Open AI LP’s image generator DALL-E and, of course, the AI at everyone’s fingertips now, ChatGPT.

The researchers figure that one of the biggest disruptions will be for people who do administrative jobs. They predict 46% of tasks in this milieu will be automated with AI. Some 44% of jobs will go in legal professions, they added. Other industries greatly affected will be architecture and engineering (37%), business financial operations (35%), community and social services (33%) and management (32%).

They put “arts, design, entertainment, sports, media” into one category, which covers a very large swath of diverse employment. They believe AI will replace 27% of humans in this area. They also said only 6% of jobs will be lost in the construction trade and just 4% in maintenance. The countries that will see the largest displacements, they believe, are Hong Kong, Israel, Japan, Sweden, the U.S. and the U.K., in that order.

Interestingly, the BBC spoke to Carl Benedikt Frey, who’s the future-of-work director at the Oxford Martin School at Oxford University. He said it’s impossible to say what will happen but added that new technologies in the past have led not always to outright displacement of humans but to lower wages.

He gave the example of GPS technology when drivers with navigation skills became less valuable. “The result was lower wages, not fewer drivers,” he said. He said this may well happen in other jobs, such as journalism. It’s almost certain the same thing will happen in design jobs when image generators become the go-to tool for people not prepared to pay for skilled digital designers.

The researchers also said most jobs will be “complemented rather than substituted,” something leading automation companies have been saying for years. “The large share of employment exposed to automation from generative AI raises the potential for a boom in labor productivity that significantly increases global output,” they explained. “Most workers are employed in occupations that are partially exposed to AI automation and, following AI adoption, will likely apply at least some of their freed-up capacity toward productive activities that increase output.”

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