4,000 CEOs Say No Impact From AI: Study Spurs Huge Selloff

A U.S. study of nearly 6,000 company executives in four countries found that their use of artificial intelligence so far has had surprisingly little impact or benefit.

ResearchThe National Bureau of Economic Research conducted a survey of nearly 6,000 chief financial officers, CEOs and other executives from a stratified sample of companies in the United States, the United Kingdom, Germany and Australia.

The findings, released this month, were a factor in a sharp market selloff in artificial intelligence-related technology stocks. As of mid-February, major technology companies such as Amazon, Microsoft, Nvidia and Alphabet have lost more than $1 trillion in market value due to concerns that high capital expenditures on artificial intelligence will not yield immediate returns.

See also: Japan agrees to first $36 billion investment in U.S.

economic downturn, known as ‘software-mageddon’Within nine days of the major investment announcement, Amazon’s stock price fell more than 18%. Microsoft shares have fallen by a similar amount since the start of the year, while Alphabet is down about 11% from its recent highs.

Chipmaker AMD’s stock price also plummeted more than 17% after it forecast lower-than-expected revenue.

The study’s authors said there were four main findings:

• “First, about 70% of companies actively use AI, especially younger, more productive companies.
• “Second, while more than two-thirds of executives use AI regularly, they use it for an average of only 1.5 hours per week, and a quarter report not using AI at all.
• “Third, companies have reported little impact from AI over the past three years, with more than 80% reporting no impact on employment or productivity.
• “Fourth, companies predict that there will be a considerable impact in the next three years, predicting [that] Artificial intelligence will increase productivity by 1.4%, increase output by 0.8%, and reduce employment by 0.7%. “
• They also surveyed individual employees, and they predicted “employment will increase by 0.5% over the next three years due to artificial intelligence.”

productivity paradox

So, the results aren’t all bad. In fact, economists point out that a similar “productivity paradox” also appeared in the IT era of the 1970s and 1980s.

Economist, Nobel Prize winner Robert Solow pointed out in 1987 The arrival of computers, transistors, microprocessors, and integrated circuits in the “information age” initially caused productivity growth to slow from the late 1940s to the early 1970s, before productivity began to climb in the following decades.

February 14, Apollo Chief Economist Thorston Slock Said: “The same could be said today: ‘AI is everywhere, except in the macroeconomic data that is coming’.”

“Today, you don’t see AI in the employment data, productivity data or inflation data. Likewise, for the S&P 493 (all but the ‘Big Seven’), there is no sign of AI in margins or earnings expectations.

“Maybe there is a J-curve effect in AI, and it takes time for AI to show up in the macro data. Maybe not.”

Slock said value creation from AI models could stem from “how generative AI is used and implemented in different areas of the economy,” as the academic literature remains inconclusive on AI’s potential macro impacts.

Three years since the release of ChatGPT, “it looks like AI may augment the workforce in some areas rather than replace it in all areas.”

See also:

Amid Hollywood outrage over AI video models, ByteDance vows to make changes

Tech leaders fly to India for AI summit amid concerns

‘Software-Mgeddon’ wipes out $23 billion from Indian IT stocks

Nvidia delays sales of artificial intelligence chips to China again due to security review

Nvidia joins India in spending $12 billion to back AI, robotics and chip companies

Amazon, Microsoft will invest more than $50 billion in artificial intelligence in India

Google to invest $15 billion in building artificial intelligence data center in India

China ‘cuts electricity bills in half’ for its AI chip companies – FT

The ‘Big Short’ is betting $1 billion that the ‘AI bubble’ will burst

Senior analyst warns that artificial intelligence is ‘virtually useless’

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd newspapers in Sydney, Perth, London and Melbourne before traveling to South East Asia in the late 1990s. He served as a senior editor at The Nation for more than 17 years.