AI is not good enough to replace you at work, and yet, it might soon be the reason you lose your job. How could that be possible?
I believe there are four different ways in which even incompetent AI could crush your career. And a fifth possibility that might actually be a good outcome for you and me.
In this series of posts, we will explore these five reasons together, and enjoy some mutual anxiety over the future.
This article will cover the first reason – CEOs will screw up and you will pay the price.
If that sounds like a tall claim to you, let me bring your attention to a recent piece of history that ought to be fresh in the minds of everyone from Zoomers to Boomers. The Coronavirus pandemic – it was a period of time that cost us so much, but also offered valuable lessons. We have to take care that we do not forget those hard earned lessons too soon.
In particular, the lesson we will look at is how share price addiction led to poor planning that was expertly fixed by corporate leaders through mass layoffs.
It began as an impressive demonstration of the power of technology. The pandemic was a time of suffering for many, but a silver lining to the dark cloud was the abundance of online services that let us continue to work, collaborate, order groceries, and entertain ourselves. The spike in usage of online services led to a business boom for companies like Amazon, Netflix, and Zoom. In a sensible world, this should have been great for consumers, and great for the businesses who would have seen increased profits during this time.
Unfortunately, such happiness is not allowed in a business environment that compulsively chases the illusion of growth, through ever-rising share prices. The sudden surge in online businesses during the pandemic would almost certainly have had an expiry date. Once Covid retreated, and people could move freely in public again, there would be a return from the digital to the physical.
But for a business environment that had become used to compulsive growth, this was bad news. And so they crafted narratives that could sustain the growth seen during the pandemic. They said that the increased usage of online services was not a temporary necessity – it was ‘the new normal’.
It was half wishful thinking, half an attempt to shape public perception and permanently change social and economic reality.
Corporations built upon the ‘new normal’ strategy in various ways.
Amazon thought the new normal would spell the death blow for struggling physical retailers, heralding the age of total e-commerce domination. They invested heavily in massive new warehouse capacity.
Netflix thought the new normal would be one where people would only find happiness within the confines of their homes, their eyes fixed upon a screen, binge watching shows on Netflix. They ramped up spending on content by over 20% in 2022.
And Facebook … oh boy. During the height of the pandemic, CEO Mark Zuckerberg shared his very smart vision for what the world would soon look like. He was going to give people the opportunity to spend hours with their faces covered by virtual reality headsets, and human society would move from living rooms and offices to cartoonish three-dimensional worlds. It was going to be the greatest thing since apps, maybe even since sliced bread. To his credit, Mark put his money where his mouth was, and committed hard to this vision, renaming his company to ‘Meta’. In Mark’s new normal, over a billion people would live sort-of lives in his meta-verse. His company has spent tens of billions of dollars to make this not-a joke.
What happened next? The new normal turned out to be a false narrative. As soon as pandemic restrictions were lifted, people rushed to make up for lost time. They relished being able to go out for a drink, watching movies in cinema halls, traveling, and meeting friends and loved ones in person.
To be clear, there was no catastrophe for digital businesses, as adoption had been on a strong trajectory before the pandemic, and this long term trend continued after the pandemic was lifted. The only ‘issue’ was that the anomalous growth of the lockdown months were over, and financial projections made under the delusion of a ‘new normal’ had failed.
So the massive investments made into warehouses, content, and virtual worlds were not going to pay off. Growth in profits was going to fall under expectation, and this was starting to reflect in share prices. The NASDAQ 100 (representative of many of the top tech companies in the US) had reached 16,500 points in late 2021, but had fallen to under 11,000 points by late 2022. All the gains made during the pandemic were wiped out in this collapse.
Business leaders had failed in their bets, and shareholders were left seeing a grim, downward line on charts. Thanks to those charts, it was not enough to heal from the prolonged tragedy, or celebrate the recovery of economic activity. So how did these business leaders fix their errors? Simple – they let accountability trickle down the hierarchy till it accumulated amongst members of their staff. They rolled out mass layoffs, firing thousands of workers while chanting words loved by Wall Street such as ‘efficiency’ and ‘realignment’.
So how does this relate to the ongoing AI rush? Tech corporations have barely washed off the stench of the ‘new normal’ narrative, but have moved on to declaring the coming of an AI revolution. The surging investments of the pandemic are back, with corporations spending eye-watering amounts of capital on AI infrastructure. Over the next two years, Amazon, Meta, Google, and Microsoft will spend $750 billion on datacenters, servers, and chips. Yes, that’s ‘billion’ with a ‘b’.
Investments are only as good as their returns though, and that is where the AI rush starts to look dubious. AI has amazed us with its capabilities and has helped millions to research, code, and fabricate alarmingly-realistic videos. Yet, it has major limitations as a replacement for human intelligence, as shown by reports that AI projects have failed 95% of the time. However, we also see reports of companies conducting mass firings, often citing AI as a reason. But the real story emerges when we look closer at these stories, such as Amazon announcing their largest ever layoffs. Amazon did not say that they sent home workers because they were replaced by AI. They took humans off their payroll in order to feed the insatiable appetite of their AI initiatives for ever increasing capital.
While technology will no doubt improve, it is unclear if algorithms trained on past human output can fundamentally match the human ability to learn, comprehend, and think. The shining orb that is currently lifting up the stock market and justifying endless spending may turn out to be nothing but a flimsy bubble, waiting to burst upon all of us.
What happens if AI ends up falling short, just like the Metaverse and other bets on the ‘new normal’? Mark Zuckerberg, Sam Altman, and other tech bosses already have a playbook that works. Shrug their shoulders at their flawed strategies, and sagely proclaim that they are now committed to efficiency. But how will that convince Wall Street? Simple – turn to a time-honoured tradition of trickling down accountability, and fire tens of thousands of employees. The markets will smile, and all will be well in the corporate world.
So yes, AI might never be good enough to do your work, but could be bad enough that it costs you your job.
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