An artificial intelligence gold rush has emerged over the last several months, as the business world seeks to capitalize on the anticipated opportunities presented by generative AI models like ChatGPT. This text-generating bot, released by OpenAI in November 2021, has garnered widespread attention and prompted companies and executives to consider how they can profit from it. However, while the potential for profit is clear, the impact of the technology on workers and the economy at large remains uncertain.
Generative AI models like ChatGPT hold the promise of automating tasks that were once thought to be exclusively in the realm of human creativity and reasoning, such as writing, graphics creation, and data analysis. While this could lead to increased efficiency and productivity, economists are unsure about the potential impact on jobs and overall economic growth. Despite the significant advances in AI and other digital tools over the last decade, their track record in improving prosperity and spurring widespread economic growth has been disappointing.
As companies and investors seek to capitalize on the promise of generative AI models like ChatGPT, it is important to consider the potential consequences for workers and the economy as a whole. While automation has the potential to increase efficiency and productivity, it must be implemented in a way that benefits all members of society, not just the wealthy few.
Since around 2005, productivity growth has been lackluster in the US and most advanced economies, with the UK being a particularly concerning case. This stagnation in economic growth has resulted in stagnant wages for many workers. The few sectors that have experienced productivity growth during this time, such as information services, are limited to specific cities, including San Jose, San Francisco, Seattle, and Boston in the US.
With the emergence of ChatGPT, the question arises: will this technology exacerbate the already troubling income and wealth inequality in the US and many other countries, or could it help to alleviate it? Alternatively, could ChatGPT potentially provide a much-needed boost to productivity? As companies and investors eagerly seek to capitalize on the promise of ChatGPT, it is important to consider the potential impact on workers and the economy as a whole.
While ChatGPT and other AI technologies have the potential to automate tasks and increase productivity, there is concern that this could result in job displacement and further income inequality. However, if implemented correctly, these technologies could also lead to new job opportunities and increased efficiency. As the business world continues to explore the possibilities of ChatGPT, it is important to consider the potential consequences and ensure that the benefits of this technology are shared equitably across society.
ChatGPT, with its human-like writing abilities, and OpenAI’s other recent release DALL-E 2, which generates images on demand, use large language models trained on huge amounts of data. The same is true of rivals such as Claude from Anthropic and Bard from Google. These so-called foundational models, such as GPT-3.5 from OpenAI, which ChatGPT is based on, or Google’s competing language model LaMDA, which powers Bard, have evolved rapidly in recent years.
They keep getting more powerful: they’re trained on ever more data, and the number of parameters—the variables in the models that get tweaked—is rising dramatically. Earlier this month, OpenAI released its newest version, GPT-4. While OpenAI won’t say exactly how much bigger it is, one can guess; GPT-3, with some 175 billion parameters, was about 100 times larger than GPT-2.
But it was the release of ChatGPT late last year that changed everything for many users. It’s incredibly easy to use and compelling in its ability to rapidly create human-like text, including recipes, workout plans, and—perhaps most surprising—computer code. For many non-experts, including a growing number of entrepreneurs and businesspeople, the user-friendly chat model—less abstract and more practical than the impressive but often esoteric advances that have been brewing in academia and a handful of high-tech companies over the last few years—is clear evidence that the AI revolution has real potential.
Venture capitalists and other investors are pouring billions into companies based on generative AI, and the list of apps and services driven by large language models is growing longer every day.
Among the big players, Microsoft has invested a reported $10 billion in OpenAI and its ChatGPT, hoping the technology will bring new life to its long-struggling Bing search engine and fresh capabilities to its Office products. In early March, Salesforce said it will introduce a ChatGPT app in its popular Slack product; at the same time, it announced a $250 million fund to invest in generative AI startups. The list goes on, from Coca-Cola to GM. Everyone has a ChatGPT play.
Meanwhile, Google announced it is going to use its new generative AI tools in Gmail, Docs, and some of its other widely used products.
Still, there are no obvious killer apps yet. And as businesses scramble for ways to use the technology, economists say a rare window has opened for rethinking how to get the most benefits from the new generation of AI.
“We’re talking in such a moment because you can touch this technology. Now you can play with it without needing any coding skills. A lot of people can start imagining how this impacts their workflow, their job prospects,” says Katya Klinova, the head of research on AI, labor, and the economy at the Partnership on AI in San Francisco.
“The question is who is going to benefit? And who will be left behind?” says Klinova, who is working on a report outlining the potential job impacts of generative AI and providing recommendations for using it to increase shared prosperity.
The optimistic view: it will prove to be a powerful tool for many workers, improving their capabilities and expertise, while providing a boost to the overall economy. The pessimistic one: companies will simply use it to destroy what once looked like automation-proof jobs, well-paying ones that require creative skills and logical reasoning; a few high-tech companies and tech elites will get even richer, but it will do little for overall economic growth.
Helping the least skilled
The question of ChatGPT’s impact on the workplace isn’t just a theoretical one.
In the most recent analysis, OpenAI’s Tyna Eloundou, Sam Manning, and Pamela Mishkin, with the University of Pennsylvania’s Daniel Rock, found that large language models such as GPT could have some effect on 80% of the US workforce. They further estimated that the AI models, including GPT-4 and other anticipated software tools, would heavily affect 19% of jobs, with at least 50% of the tasks in those jobs “exposed.” In contrast to what we saw in earlier waves of automation, higher-income jobs would be most affected, they suggest. Some of the people whose jobs are most vulnerable: writers, web and digital designers, financial quantitative analysts, and—just in case you were thinking of a career change—blockchain engineers.
“There is no question that [generative AI] is going to be used—it’s not just a novelty,” says David Autor, an MIT labor economist and a leading expert on the impact of technology on jobs. “Law firms are already using it, and that’s just one example. It opens up a range of tasks that can be automated.”
Autor has spent years documenting how advanced digital technologies have destroyed many manufacturing and routine clerical jobs that once paid well. But he says ChatGPT and other examples of generative AI have changed the calculation.
Previously, AI had automated some office work, but it was those rote step-by-step tasks that could be coded for a machine. Now it can perform tasks that we have viewed as creative, such as writing and producing graphics. “It’s pretty apparent to anyone who’s paying attention that generative AI opens the door to computerization of a lot of kinds of tasks that we think of as not easily automated,” he says.
The worry is not so much that ChatGPT will lead to large-scale unemployment—as Autor points out, there are plenty of jobs in the US—but that companies will replace relatively well-paying white-collar jobs with this new form of automation, sending those workers off to lower-paying service employment while the few who are best able to exploit the new technology reap all the benefits.
In this scenario, tech-savvy workers and companies could quickly take up the AI tools, becoming so much more productive that they dominate their workplaces and their sectors. Those with fewer skills and little technical acumen, to begin with, would be left further behind.
But Autor also sees a more positive possible outcome: generative AI could help a wide swath of people gain the skills to compete with those who have more education and expertise.
One of the first rigorous studies done on the productivity impact of ChatGPT suggests that such an outcome might be possible.