MIT economist: AI hype overblown, job impact limited
NEW YORK, UNITED STATES — In a recent Bloomberg interview, renowned MIT economist Daron Acemoglu offered a sobering perspective on the current artificial intelligence (AI) frenzy, warning of potential economic pitfalls and overinflated expectations.
While acknowledging AI’s promise, Acemoglu expressed concern about the technology’s limited impact on job automation and the risks of excessive investment.
Limited job automation
Acemoglu estimates that only about 5% of jobs are likely to be significantly impacted by AI over the next decade. This figure is in contrast with the widespread belief that AI will revolutionize the workforce.
“A lot of money is going to get wasted. You’re not going to get an economic revolution out of that 5%,” Acemoglu stated.
The economist points to several factors limiting AI’s job impact, including reliability issues and a lack of human-level judgment. He argues that many white-collar jobs or physical work require highly reliable information and faithful implementation of complex tasks, which current AI models struggle to provide without human oversight.
“You need highly reliable information or the ability of these models to faithfully implement certain steps that previously workers were doing,” he said.
“They can do that in a few places with some human supervisory oversight, but in most places they cannot. That’s a reality check for where we are right now.”
Human element remains crucial
A recent survey by cloud contact center provider Talkdesk revealed that AI is set to transform the healthcare insurance experience, yet the human element remains indispensable.
Seventy-seven percent of respondents prefer discussing claims with a human representative, and 72% favor human interaction for tasks requiring empathy or nuanced decision-making.
Meanwhile, Workera introduced AI mentor Sage for personalized skill assessment, but acknowledged that it cannot replicate the emotional support, encouragement, and networking opportunities that human mentors provide.
Previously, a study by MIT’s Computer Science and Artificial Intelligence Laboratory (CSAIL) revealed that AI job displacement is slower than predicted. It estimated that only 23% of wages for visual tasks are economically viable to automate with AI right now .
Investment bubble concerns
Acemoglu warns that the current AI investment boom may be unsustainable. This spending frenzy is exemplified by the second-quarter figures of Microsoft, Alphabet, Amazon, and Meta Platforms, which collectively invested over $50 billion in capital spending, much of it directed towards AI.
Potential future scenarios
The economist outlines three potential scenarios for the AI industry’s future:
- A gradual cooling of hype and modest adoption of the technology
- A short-term frenzy followed by a tech stock crash and disillusionment
- An unchecked mania leading to widespread job cuts and excessive investment, followed by economic turmoil
Acemoglu believes the most likely outcome is a combination of the second and third scenarios, driven by corporate fear of missing out on the AI boom.
“When the hype gets intensified, the fall is unlikely to be soft,” Acemoglu cautioned.
As the AI hype continues to build, Acemoglu’s cautionary perspective serves as a reminder to approach the technology’s potential with measured expectations and careful consideration of its economic implications.
