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The AI revolution could put pressure on governments to enact new social safety nets to protect people who lose their jobs but cannot upskill, warns International Monetary Fund chief. .
“If we do not distribute profits carefully, [of AI] “Social safety nets are paramount in the world of artificial intelligence,” IMF Managing Director Kristalina Georgieva told Yahoo Finance Live.
Georgieva’s comments came as a major IMF study on the global economic impact of the rise of AI was released on Sunday. The findings coincide with the 2024 World Economic Forum in Davos, Switzerland, where Microsoft (MSFT) co-founder Bill Gates, OpenAI’s Sam Altman and Salesforce AI will be a hot topic among prominent technology participants such as (CRM) CEO Mark. Benioff.
If the IMF’s findings are any indication, these social safety nets could require huge sums of money.
According to the IMF, approximately 40% of global jobs are exposed to AI. In developed countries, approximately 60% of jobs are exposed to AI due to the prevalence of “cognitive task” oriented jobs. The overall exposure is 40% to emerging markets and 26% to low-income countries, according to the IMF.
While AI-related disruption may be less pressing in many emerging market and developing economies, the IMF reasons that these countries are also ready to take advantage of the benefits of AI. This could “exacerbate” the “digital divide” and “cross-national income disparities,” the study concludes.
Georgieva believes that older people may be severely affected by the spread of AI and require social safety nets.
“We have to be able to support people who have fallen off a cliff because they are out of work. We are also looking at who is most adaptable. They are highly adaptable, but in other areas they are less adaptable. Older generations may need more support to catch up in this new world,” Georgieva added.
The IMF is not the only voice on the potential economic aftershocks of AI.
In an independent study in 2023, Goldman Sachs economists found that advances in AI could expose the equivalent of 300 million full-time jobs to automation worldwide. In other words, unemployment.
Goldman economists predicted that roughly two-thirds of U.S. jobs are subject to some degree of automation by AI.
Look no further than the news industry for a prime example of what the IMF and Goldman are discussing.
Large-scale language models (LLMs) are well on their way to capturing news and information and delivering it to the masses around the world, reducing the need to visit websites. Meanwhile, media organizations are moving to automate some newsroom functions to increase content volume and reduce costs.
News Corporation CEO Robert Thomson (NWSA) told Yahoo Finance Live in late 2023 that AI will be “game-changing” for news.
Mr Thomson went on to warn that the industry could face a “potential tsunami of job losses” due to new technology.
“These are not only jobs lost, but also insights lost. So while it’s important that all media companies understand the impact, the big AI companies have an obligation to understand the impact too.” Mr Thomson added.
Brian Sozzi I’m the executive editor of Yahoo Finance. Follow Sozzi on Twitter/X @BrianSozzi And even more linkedin. Have a tip about a deal, merger, activist situation, or more? Email brian.sozzi@yahoofinance.com.
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