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Entrepreneur
25 minutes ago
- Entrepreneur
Goldman Sachs Data Shows AI's Unemployment Impact
AI has led to an increase in unemployment for 20- to 30-year-old tech workers, according to Goldman Sachs. AI is eliminating jobs in the U.S., especially for young tech workers just starting in their careers. In a Monday Goldman Sachs note, obtained by Business Insider, the investment firm wrote that since ChatGPT was introduced in November 2022, the tech sector's share of U.S. employment, which had just hit its highest point, has been declining. Unemployment is especially high for 20- to 30-year-olds aiming to work in the tech sector, the report found. Since the start of 2024, the unemployment rate for that group has risen by nearly 3%, more than four times greater than the overall rate. Goldman Sachs says that the increase is an indicator that AI is starting to take over white-collar work, starting at the entry level. Related: Here Are the Odds of Landing a Summer Internship at Goldman Sachs or JPMorgan The bank's Chief Economist, Jan Hatzius, estimated in the note that AI will replace 6% to 7% of all U.S. workers within the next decade. However, he predicted that the unemployment rate would only grow by a "manageable" 0.5% due to AI, because affected workers would shift to other industries. AI isn't just increasing unemployment by taking over entry-level tech jobs — it is also causing mass layoffs. According to a Tuesday report shared by the coaching company Challenger, Gray & Christmas with CBS, AI has directly caused more than 27,000 job cuts in the private sector since 2023. "The industry is being reshaped by the advancement of artificial intelligence," Challenger, Gray & Christmas told CBS. Related: Is AI the Reason for Your Layoff? New York Becomes the First State to Require Companies to Disclose If So. Tech leaders are also sounding the alarm on the technology's ability to replace jobs. Dario Amodei, the 42-year-old CEO of AI startup Anthropic, predicted in May that AI could eliminate half of all entry-level, white-collar work and result in unemployment rising to as much as 20%. AI will affect white-collar industries like technology, law, and finance, Amodei said. Nobel Prize winner Geoffrey Hinton, 78, had a similar prediction. Hinton, who is often called the Godfather of AI because of his pioneering work on neural networks, forecast in June that "AI is just going to replace everybody" in white-collar jobs. "I think for mundane intellectual labor, AI is just going to replace everybody," Hinton said at the time. Join top CEOs, founders and operators at the Level Up conference to unlock strategies for scaling your business, boosting revenue and building sustainable success.
Business Insider
an hour ago
- Business Insider
Amazon (AMZN) Gets a Buy from Telsey Advisory
In a report released today, Jason Strominger from Telsey Advisory maintained a Buy rating on Amazon, with a price target of $265.00. The company's shares closed yesterday at $211.65. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. According to TipRanks, Strominger is a 2-star analyst with an average return of 1.7% and a 57.14% success rate. Strominger covers the Consumer Cyclical sector, focusing on stocks such as Lululemon Athletica, Ralph Lauren, and Ulta Beauty. In addition to Telsey Advisory, Amazon also received a Buy from Citi's Ronald Josey in a report issued yesterday. However, on August 1, Wells Fargo reiterated a Hold rating on Amazon (NASDAQ: AMZN).
CNBC
2 hours ago
- CNBC
AI is already impacting the labor market, starting with young tech workers, Goldman economist says
Changes to the American labor market brought on by the arrival of generative AI are already showing up in employment data, according to a Goldman Sachs economist. Most companies have yet to deploy artificial intelligence in production cases, meaning that the overall job market hasn't yet been significantly impacted by AI, said Joseph Briggs, senior global economist of Goldman's research division, in a podcast episode shared first with CNBC. But there are already signs of a hiring pullback in the technology sector, hitting younger employees there the hardest, Briggs said. "If you look at the tech sector's employment trends, they've been basically growing as a share of overall employment in a remarkably linear manner for the last 20 years," Briggs said on the episode of "Goldman Sachs Exchanges" to be aired Tuesday. "Over the last three years, we've actually seen a pullback in tech hiring that has led it to undershoot its trend." Since its November 2022 release, OpenAI's ChatGPT has fueled the rise of the world's most valuable company, Nvidia, and forced entire industries to contend with its implications. Generative AI models are quickly becoming adept at handling many routine tasks, and some experts say they are already on par with human software engineers, for instance. That has sparked concerns that while automation will make companies more productive and enrich shareholders, swaths of the job market could be impacted in the coming years. Technology executives have recently become more candid about the impact of AI on employees. Companies including Alphabet and Microsoft have said AI is producing roughly 30% of the code on some projects, and Salesforce CEO Marc Benioff said in June that AI handles as much as 50% of the work at his company. Young tech workers, whose jobs are the easiest to automate, are the first concrete signs of displacement, according to Briggs. Unemployment rates among tech workers between 20 and 30 years old jumped by 3 percentage points since the start of this year, he said. Briggs recently co-authored a report titled "Quantifying the Risks of AI-Related Job Displacement" that cites labor market data from IPUMS and Goldman Sachs Global Investment Research. "This is a much larger increase than we've seen in the tech sector more broadly [and] a larger increase than we've seen for other young workers," he said. The approach from technology CEOs has been to hold off on hiring of junior employees as they begin to deploy AI, said George Lee, the former technology banker who co-heads the Goldman Sachs Global Institute. "How do I begin to streamline my enterprise so I can be more flexible and more adaptive... yet without harming our competitive edge?" Lee said in the podcast episode. "Young employees for this period of time are a little bit the casualty of that." Over time, roughly 6% to 7% of all workers could lose their jobs because of automation from AI in a baseline scenario, according to Briggs. The transition could be more painful, both to workers and the broader U.S. economy, if adoption among companies happens faster than the roughly decade-long period he assumes, Briggs said. That could either be because of advances in the technology or an economic slowdown that encourages companies to cut costs, he said. If AI researchers achieve AGI, or artificial general intelligence that equals a person's ability to learn and adapt across domains, instead of being narrowly deployed, the impact on workers would probably be deeper. "Our analysis doesn't factor in the potential for the emergence of AGI," Briggs said. "It's hard to even start thinking about the impact on the labor market, but I would guess there probably and undoubtedly is more room for labor substitution and a more disruptive impact in that world."
