AI's advancement could trigger economic recession and widespread job losses, according to Klarna's CEO.
Here's a fresh take on the topic:
AI's Advent on the Corporate Scene: A Double-Edged Sword or a Recession Catalyst?
AI, the brainchild of technology advancements, is rapidly making inroads into businesses, promised to boost efficiency and save time. Even the government has voiced its support, with claims of saving two weeks annually for civil servants. But is this rosy picture all there is to it? Not so fast, warns Sebastian Siemiatkowski, CEO of Klarna, a 'buy now, pay later' company based in Stockholm.
According to Siemiatkowski, the AI revolution might lead to a downturn in the economy due to mass layoffs of office staff. He argues that tech moguls often underestimate AI's impact on employment, with Klarna reducing its workforce from 5,500 to 3,000 employees over the years.
"Many CEOs in the tech sector tend to brush off the consequences of AI on jobs, especially white-collar jobs. I don't intend to be one of them. The implications for white-collar jobs are significant, and when that happens, it usually triggers a recession in the short term. Unfortunately, I don't see a way to avoid it, given the technological advancements we're witnessing," Siemiatkowski shared in an interview with The Times Tech Podcast.
He bases his predictions on his observations of the growing number of companies embracing AI technologies, but economic data has yet to factor in the AI-driven job shift.
"I get an email almost every day from the CEO of a tech or large company, expressing interest in collaboration. If I add up the number of jobs mentioned in those emails, it's substantial," Siemiatkowski remarked.
AI Boosting the Value of the 'Human Touch'
However, Siemiatkowski believes that certain jobs might be shielded from automation, such as those in customer service where the human touch is crucial for addressing complex banking issues and dealing with fraud.
"The value of the human touch will increase. People working in customer-facing roles will need to upskill, providing higher-quality service," Siemiatkowski said.
His sentiments are echoed by Dario Amodei, the CEO of Anthropic, who predicted that half of entry-level professional jobs could vanish in the next five years. Meanwhile, other AI luminaries, like Arthur Mesch from Mistral and Demis Hassabis of Google DeepMind, have cautioned against the tech industry's excessive fascination with AI, stating that it would take another five to ten years before AI surpasses human intelligence.
Overall, AI represents both a formidable challenge, with potential job displacement and recessionary risks, and exciting opportunities, such as economic growth, new job creation, and shifts in business models. The key to avoiding a recession due to AI-driven job displacement lies in adapting swiftly, reskilling workers, and fostering innovation.
- In light of Sebastian Siemiatkowski's warning, the rapid integration of AI in banking and other sectors might lead to significant job losses, potentially triggering a short-term recession due to mass layoffs of office staff.
- Contrary to the predicted job displacement, certain roles such as customer service in banking, where the human touch is essential for addressing complex issues and dealing with fraud, may be shielded from automation, and instead, there will be a need for these workers to upskill and provide higher-quality service.
