Will AI Replace Your Job? It Depends, Financial Markets Offer Insights

Public anxiety around AI’s potential to upend the white-collar job market has been accelerating since OpenAI unveiled ChatGPT in November 2022. While this technology is still in its early stages, its impact is already affecting the global financial landscape. Since November we have seen historic market turbulence and a significant uptick in market volatility and corporate unease, indicating a struggle to discern victors and casualties in the face of this budding AI revolution. This turbulence will continue throughout this nascent stage of AI development as the market tries to find its feet. For now, the question remains: Will your job withstand AI?

In the months following the release of ChatGPT and Google's GOOG subsequent release of Bard, companies centered around large language models have powered over half of this year's S&P 500 gains, as reported by a JPMorgan analysis. Chipmaker Nvidia NVDA stands out as an early victor in this AI surge becoming the sixth public company in the world valued at over $1 trillion in May this year.

But the picture is not clear-cut. Influences like U.S. monetary policy add to the complexity, as a significant divergence has emerged since March 2023: the tech-heavy Nasdaq Composite has outperformed the Russell 2000 by over 11 per cent. This gap mirrors the widening chasm between those expected to prosper or falter amidst AI advancement. Nevertheless, predicting the future trajectory of AI is complex, as its evolution is a dynamic process, making it impossible to accurately anticipate its eventual impact.

The tremors of AI advancement extend well beyond market volatility and corporate anxieties to reshape the employment landscape dramatically. British Telecom, under CEO Philip Jansen, exemplifies this with its unprecedented job cuts. On BBC Radio 4's Today program on June 8, 2023, Jansen highlighted BT's decision to eliminate 55,000 jobs while looking to replace up to a fifth of those cuts with technologies including AI. The decision closely followed Vodafone's announcement of its plan to cut their workforce by a tenth over the coming three years, symbolizing the shifting employment dynamics prompted by recent AI advancements.

Jansen justified the move as a necessary step towards making BT future-ready. BT's move is significant as it is one of the UK’s biggest employers with a near monopoly on the British telecoms industry. Rather than sparking backlash, the Communication Workers Union released a statement noting the decision was hardly a surprise. Rather than resisting the change, the CWU has chosen to take a proactive approach. They have instead expressed BT should focus on upskilling workers, especially those whose roles could be superseded by technological advancements. The CWU’s reaction hints at an increased acceptance of AI's role in job transformation. Trade unions are traditionally strong opponents of job cuts, so their acceptance is a noteworthy shift towards a more open perspective on AI's integration into the workforce. This nuanced reaction could be the recognition of AI's inevitability as a disruptive force in the economy.

Jansen's perspective is mirrored by the chief executives of some of the world's leading employers. In his annual shareholder letter, Jamie Dimon underlines the importance of AI and the data that feeds it as pivotal to JPMorgan’s future success and the importance of implementing new technologies cannot be overstated. Yet, when comparing the relative acceptance of AI in sectors like telecommunications and finance to the fierce pushback seen in the creative industries, an intriguing pattern emerges.

As AI edges into creative sectors, we might anticipate greater resistance. The 2023 writers' strike serves as a prime example. In May, over 10,000 unionized film and television writers downed their pens in protest for the first time in 15 years. They sought to highlight the indispensable role of human creativity in their field and voiced deep concerns over the potential use of AI to replace writers.

While society seems to accept AI taking over mundane and repetitive tasks, its intrusion into areas that currently demand human creativity are facing backlash. This reaction suggests a possible threshold in our relationship with AI: we may welcome its role in easing our burden from mundane tasks, but we will resist when it challenges our unique human capacities such as creativity and critical thinking. Is this a sign that white-collar workers should be glancing over their shoulders in fear of their artificial replacements? Not exactly.

Given AI is still maturing, making precise predictions about its impact on financial markets and the future of work remains an unfathomable task. However, one thing is certain, those who not only embrace new technologies but also understand and effectively integrate them generally come out on top.