About six months ago, or so, Artificial Intelligence was new news, with both hope and promise. It was predicted the progress would show results within a few years. The main question afloat was whether AI would improve worker and company productivity, or would it ultimately reduce the need for workers.
Well, now we have some answers, with evidence. First, large tech companies have been fueling the fire with huge amounts of funding. Microsoft, Google, Amazon, Meta are projected to invest $220-320 billion in the near future. Venture capital has followed suit, with $50 to$115 billion raised by next year, and $100 billion by government. There is a bit of a race, and some ego involved in the acceleration, with expectations in the $3-4 trillion range by 2030.
Much of the predicted projection is based on computer chip production and talent in companies liked Nvidia, and through countries like U.S., China and Europe.
What are the areas/companies that will be early adopters? According to sources, they will be media and creative roles. Advertising agencies, tech/coding jobs, back-office administration, manufacturing, operations and logistics. In these fields, the areas of improvement are easily predictable, with “higher” uses such as lawyers, health work/science, data specialists and finance, being less predictable. Most everything will be impacted, to one degree or another.
Back to the “big question” - Will the impacts be helpful, or detrimental? As usual, the response is “it depends.” Many industries will be improved with great progress and efficiencies. On the other hand some will be diminished, or eliminated. AI has already been in some more obvious places; For example, virtual agents replacing call centers, graphic design, video editing, robotic, assembly lines, diagnostic support, drug discoveries. These uses both support and/or replace workers.
The not-so obvious replacement areas are AI engineers themselves, ironically working in tandem with other AI.
Back to the question, the data and projections suggest that AI will replace or reduce human employment. Goldman Sachs estimated that 300 million full-time jobs could be exposed for automation in a few decades McKinsey predicts that, by 2030, 30% of all work hours in the U.S.
The statistics do not bode well for employment. Thus, much real estate will be underutilized or vacant based on lower employment. Be aware and wary. Some parts are inevitable and will be obvious sooner rather than later.
Daniel Calano, CRE, is managing partner and principal of Prospectus, LLC, Cambridge, Mass.