Warren Buffett is the first to admit that he doesn't know much about artificial intelligence. This is consistent with his long-held philosophy of avoiding technology that is beyond his understanding. At Berkshire Hathaway's annual meeting last weekend, he said his huge stake in Apple, its largest, albeit reduced, stake, for example, came about as an epiphany more related to consumer success than a bet on technology. said. But at a high-profile event in Omaha this year, the billionaire investor and Berkshire CEO and chairman couldn't avoid AI as a shareholder concern.
Buffett answered several questions about artificial intelligence. Buffet called AI profound, saying the technology is like a “genie” and that once it's out of the bottle, it can have disastrous effects. His worst fear is the ability to deceive at scale, enabled by AI, against a breakthrough scientific threat comparable to nuclear weapons, with unintended consequences and risks to humanity. And when it comes to the global impact of AI, which has the potential to change every individual's life every day, there's at least one question no one can answer, Buffett said. This is a question that has puzzled leading economists for a century, he says.
“That can create a tremendous amount of leisure time,” Buffett said. “Now, what the world does with leisure is another matter. … I know that so many people think that the first thing they want when they go to work is leisure. And I like “The thing is, there are actually more problems to solve,” Buffett said. Buffett famously said he worked for decades by “tap dancing” in his Omaha office.
Mr. Buffett cited the example of John Maynard Keynes, one of the most important economic thinkers of our time, who correctly predicted that per capita output would increase exponentially, but that as productivity increases, could not predict what it would do. Keynes is generally considered the father of macroeconomics and is best known for his support of government intervention through social and employment programs to stabilize the economy during economic downturns such as the Great Depression. He has written books such as “A General Theory of Interest, and Money''. ” recommended by Mr. Buffett to add to your reading list.
Productivity has skyrocketed over the past few quarters. According to BLS data, productivity has been in a long-term slump since the coronavirus pandemic, with productivity only improving in the past four quarters with a roughly 3% year-over-year increase. This recovery has executives asking questions about what factors may be at play, from AI to mandatory return-to-office requirements. However, most people argue that the implementation of this technology is still premature and has nothing to do with AI, which has already been in place for years and can track outcomes, and which everyone is talking about today. It is distinguished from generative AI, which is based on It will take some time for it to be reflected in the data.
AI will eventually become a major driver of labor productivity, even if it is not already here. Gary Cohn, vice chairman of IBM and former chairman of the National Economic Council, told CNBC last week that AI adoption is happening rapidly and productivity gains are happening, albeit slowly. “Every company is looking at AI and deciding where it can help them,” he said in a recent interview on CNBC's “Money Movers.”
“This is an evolution. We're going to evolve into this in the productivity game, and it's going to trickle down slowly throughout the economy,” Cohn said. But he added, “I don't think we've seen real productivity gains from AI yet.”
Most companies are still in the process of setting an AI budget and a comprehensive strategy for how AI can help both customers and employees, and getting into implementation mode.
MongoDB CEO Dev Ittycheria recently told CNBC that the company released a suite of tools last week to help companies that are “overwhelmed by AI,” and executives have to ask themselves when they will realize the value and benefits of AI. He said that they have reached the stage where they are asking questions. The market is going through a phase where value only exists at the bottom layer, such as Nvidia and ChatGPT/OpenAI, and it is now important for enterprises to prepare applications that will be built on top of that infrastructure.
“Obviously, there is a trend as we move towards 'agent' workflows, where agents autonomously perform actions on behalf of end users. That's a little bit further down the road, but people are building apps to improve customer experience. Find new ways to improve your business and drive growth. ”
Productivity and technology
Productivity booms are rare and tend to be once-in-a-generation events. The last time it happened was in the mid-to-late 1990s leading up to the dot-com bust. This period saw significant economic growth, but it was not particularly driven by the creation of new jobs.
The issue of a reduction in the amount of jobs available due to advances in technology is an ongoing concern, and since the release of ChatGPT at the end of 2022, job losses, to reflect uncertainty about the exact impact Countless studies have been published that focus on the commonly used term 'employment'. In “AI Exposure”.
Companies say AI will not replace jobs, but rather allow human workers to focus on higher-value skills and tasks, while machines do the mechanical tasks humans don't want to do. I want to. However, about 37% of business leaders surveyed by Resume Builder said workers will be replaced by technology in 2023, and 44% said advances in AI will cause further layoffs this year. Historically, however, technological advances such as increased industrialization have not proven to be the career killers that experts warn.
Due to the lack of potential job opportunities with the growth of AI, some professionals, not just billionaires and politicians, are seeking universal basic income to compensate for lower or no salaries and keep the economy afloat. (UBI). . Icons in the tech world discussing this idea include Elon Musk, Mark Zuckerberg, and Sam Altman.
Still, there are reasons to be skeptical about the exact relationship between technology and work.
As Nobel Prize-winning economist Robert Solow, the godfather of productivity research, said in the late 1980s, “The computer age is everywhere except in productivity statistics.”
This was known as the Solow Productivity Paradox, and the boom of the late 90s would challenge it. However, subsequent research revealed that there was actually a vague relationship between the dot-com era and productivity improvements. Co-authors of the paper at McKinsey told the Harvard Business Review that adopting Mr. Solow's view of the 1990s technology boom was an “oversimplification,” and that the subsequent theory that the Internet drove the productivity boom was “an oversimplification.” He said he had the same opinion.
With these concerns and unanswered questions in mind, Buffett believes that human labor-intensive companies like Berkshire Hathaway should balance how to leverage technology to increase efficiency without putting humans at risk. He said that it is necessary to consider.
“Just as I don't know how you can be sure that when you used two atomic bombs in World War II that you didn't create something that later destroyed the world, I don't know how you could be sure that you weren't creating something that would later destroy the world. I'm not sure I'm sure it's going to happen,” Buffett said.