Generative AI is now all over the press, given growing concerns of AI professionals and government, particularly now that the there has been  time to think through various ramifications.  It is not my purpose to aggregate what everyone else is writing, but Economist is a respected, non-US-based news source which does deep dives into complex topics, and the below discusses some Economist analyses.

CHINA:   GAI capabilities  are controlled by the government, and since GAI invents “lies,” it is possible that it could thus  be telling the truth within China by countering government “truth.”  The government requires AI to be “objective” in its training data (as defined by the government) and the generated output must be “true and accurate,”  but Economist (4-22) speculates that strict adherence  to government regulation would “all but halt development of generative AI in China.”  Thus tight enforcement is not anticipated.

JUNIOR JOB ELIMINATION: In the same issue, Economist speculates that potential net elimination of jobs may be overstated, but in fact the lower tier of jobs is at risk.  There always will be need for senior people, to both police AI against  hallucinations and to perform senior work that presumably AI will not be able to replace.  In what I see as an analogy to the observation that COVID in the long run would deteriorate the training of junior people who were physically not on site, the Economist speculated that material reduction in junior employees might interfere with creating the next generation of senior managers.

NET EFFECT ON PROFIT: The May 13 issue contained speculation about the likely impact of AI on  AI industry and general profitability. Citing a recent Goldman Sachs article which assumed every office worker in the world utilized AI to some (stated)  extent, that could add about $430 Billion to annual global enterprise-software revenues, mostly in the US. Sounds like a lot (and it is a lot as a discrete number) but in the US pre-tax total corporate profit as a percentage of GDP would increase from today’s 12% to only 14%.  There also is little chance that a single company will hold a monopoly position in AI, with many competitors and overlapping capability. Sounds like a complex analysis for investment advisors (wonder if they will revert to AI for assistance…).

JOB IMPACT: I have kept a list of articles from Economist and elsewhere about which verticals  will lose most jobs.  Candidates include accountancy, law (though not at the lawyer level), travel agencies, teaching (particularly a foreign language, something I find unlikely as it take tremendous effort to master a foreign language without personal contact, encouragement and pressure), geographers.  And predictions are tricky: in 2013 Oxford University estimated that automation could wipe out 47% of American jobs over the next decade, BUT in fact the rich-world unemployment rate was cut in half over that period. Per Economist 5-13: “[H]istory suggests job destruction happens far more slowly.  The automated telephone switching system –a replacement for human operators — was invent in 1892.  It took until 1921 for the Bell System to install their first fully automated office.”  By 1950 the number of human operators reached its height, and people were substantially eliminated until the 1980s.  And 20% of rich world GDP is construction and farming; few computers can nail a 2×4 or pull turnips from the ground.

ABOUT LAWYERS: Economist quotes an expert in a Boston-based law firm as predicting that the number of lawyers will multiply.  AI contracts now can draft to “the 1,000  most likely edge cases in the first draft and then the parties will argue over it for weeks.”  This strikes me as perhaps unlikely, as I suspect law will move in the direction set by the National Venture Capital Association by standardizing contract forms for the notoriously wide-open business of venture finance, covering the important stuff in language that everyone begrudgingly accepts as necessary to create marketplace efficiency.  But no doubt big changes are coming.  As a lawyer myself, looking at the future of the legal profession in the age of AI, I am reminded of a song sung by Maurice Chevalier in the movie “Gigi”:  “I’m so glad/ I’m not young/anymore.”