Companies Relying on AI to Replace Humans Will Face Elimination by the Era
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After extensive discussions, society has gradually reached a consensus on the issue of 'artificial intelligence leading to job losses.' Over the past few centuries, we have never seen a new technology at the macro level that has caused such rapid job displacement. Therefore, in the long run, AI is unlikely to lead to mass unemployment, especially as the working-age population in most developed countries is declining as a proportion of the total population. However, due to the rapid adoption of ChatGPT and other generative AI technologies by companies, we may see a significant number of jobs replaced by AI in the short term.
Comparing AI technology development to the rise of electricity in the early 20th century, we find that factories took decades to transition from steam-powered central drive shafts to electric motors for individual machines. For business owners at the time, leveraging the advantages of the emerging electric technology required a complete restructuring of industries. However, the adjustment process last century was slow, giving the economy ample time to adapt. In the early stages of the transition between electricity and steam, only newly built factories used electric motors, so there was no massive job loss. Additionally, electricity created new jobs, allowing workers displaced from steam-powered factories to transition into the electric industry. Greater wealth levels created entirely new industries to attract labor, which also raised workers' expectations for life.
In the mid-20th century, a similar phenomenon occurred with the widespread adoption of computers. Although the technology developed faster than electrification, it still provided the economy with enough buffer time to avoid large-scale unemployment.
The difference with AI is that the speed at which major companies are now applying AI technologies in daily operations is so rapid that a wave of unemployment may arrive before the benefits are realized. In the short term, white-collar workers are likely to be the most affected. In fact, critics argue that society is heading toward an 'AI gold rush' enabled by advanced chip manufacturers like Nvidia, rather than a bubble. Goldman Sachs recently predicted that European and American companies will use this technology to replace a quarter of the current human labor in business operations, particularly affecting workers who previously believed their expertise made them immune to job loss.
To mitigate this risk, there are two possible options. The first is government intervention, either to slow the commercial adoption of AI (which is unlikely) or to provide special welfare programs to support and retrain the unemployed.
However, there is another often-overlooked viable solution that avoids unintended consequences from government intervention. Some companies are rapidly integrating generative AI technologies into their existing systems, not simply to automate tasks but to help employees improve their efficiency. By comprehensively resetting business processes, managers can unlock new potential for value creation. If many companies adopt this approach, society as a whole could create enough new jobs to avoid short-term job displacement crises.
But will they do it? Even the most 'laid-back' companies can typically manage control, but innovation is another matter entirely. In the past, this wasn’t a concern because there was ample time for proactive innovators to gradually reshape industries. Over time, their continuous innovation allowed society to create new jobs, offsetting the slow decline in certain roles and keeping unemployment low. However, from a macroeconomic perspective, we no longer have the luxury of time to adapt to the structural shifts brought by artificial intelligence.
Thus, without relying on government intervention, most businesses must now accelerate innovation to balance job losses with new job creation across the economy. Generative AI is rapidly integrating into commercial and social systems, but this also presents an opportunity for companies to speed up innovation. If enough businesses proactively embrace innovation, AI-induced unemployment may not become a pressing issue.
Of course, companies won’t—and shouldn’t—venture into AI solely to address macroeconomic challenges. Fortunately, they have strong commercial incentives to adopt AI. By riding the AI wave and unlocking new opportunities, businesses stand a better chance of achieving long-term growth.
Some companies are already leading the charge in AI innovation. Elon Musk, the pioneer behind reusable rockets and electric vehicles, has pledged to position Twitter (now X) as an AI leader alongside Microsoft and Google. However, given Musk’s unpredictable track record and internal uncertainty at Twitter, what does it truly mean for a company to embrace AI?
To answer this, we first examined the traits that enable companies to navigate change effectively. Tabrizi, a member of our research team, led a study analyzing 26 large corporations with strong financial performance between 2006 and 2022. The team categorized these companies into high, medium, and low groups based on agility and innovation metrics, drawing on comparable data and case studies.
What sets agile, innovative firms apart from mediocre, stagnant ones? The study pinpointed eight key drivers: purpose, obsession with customer needs, positive psychological cues for employees, maintaining a startup mindset at scale, bold exploration, high collaboration, pacing control, and dual-track operations. While most leaders praise these qualities, sustaining them in large corporations proves exceptionally difficult.
Tabrizi previously detailed how Microsoft became an industry leader by overhauling hierarchies and partnering with OpenAI. Other companies have made similar strides in AI by leveraging these drivers. Here, we focus on two critical factors—bold exploration and entrepreneurial mindset—which, when harnessed, can propel organizations toward transformative agility and innovation.
Recently, any company investing in AI has the potential to profit from it. While AI investments show clear contributions to cost reduction and may appear favorable in financial reports, focusing solely on cost savings leads to only singular profit growth. Companies fixated on cost variations may miss opportunities to create greater substantive value. Better utilization of AI technology can help businesses build more robust industry barriers. In the long run, cautious investments cannot guarantee protection from competition, nor can they help companies overcome the macroeconomic challenges they face.
"Implementing new technologies cautiously but still performing mediocrely" might be a common issue with all emerging technologies. Large corporations are inherently risk-averse, which is why they operate like well-oiled machines to control production costs within certain limits. Consequently, they often prefer to "outsource" innovation by acquiring startups, even when this approach yields limited results. All successful enterprises, especially those of considerable scale, tend to minimize risks and trial costs. However, as Brené Brown pointed out: "You can choose courage or you can choose comfort, but you cannot have both."
For businesses, "being bold" has become cliché, with leaders protesting the concept too much. But in artificial intelligence, managers must truly practice what they preach by embracing technology rather than mitigating risks. Take Adobe as an example: its Photoshop has long dominated the photography design market. When generative AI emerged, Adobe could have adopted a conservative strategy, testing the waters gradually as Kodak did with digital photography or Motorola with smartphones. Instead, Adobe chose the opposite path, rapidly integrating generative AI deeply into Photoshop. This enabled even average users to create previously impossible video content. Adobe could have viewed AI as a threat or disruption, especially since it had been continuously optimizing Photoshop before AI's emergence. Yet, its management demonstrated the courage to actively invest in AI to further empower its products.
At the technological level, chip manufacturer Nvidia became renowned for providing the best AI semiconductor chips. To outsiders, the company might seem lucky to have the right technology at the right time. But Nvidia's current achievements are no accident. Over the past decade, it has actively acquired innovative companies to develop expertise in AI. Through acquisitions and independent R&D, Nvidia expanded into numerous areas including custom chip development and software. We anticipate Nvidia will continue its aggressive innovation strategy, delivering higher-value products while leveraging AI more effectively rather than merely cutting costs.
Not every bold innovation succeeds. However, to overcome management's deep-rooted aversion to risk, a courageous mindset is essential.
To succeed in AI, maintaining an entrepreneurial spirit is as crucial as bold innovation, regardless of a company's size or history. Startups excel at identifying opportunities across the market and responding quickly to current customer needs. While large corporations have the resources to spot these opportunities, they often respond slowly due to bureaucratic hurdles and lack of decisiveness - whereas startups can penetrate markets faster under the same circumstances. OpenAI's ChatGPT outperformed Google by combining two seemingly incompatible advantages: the agility of a startup (unburdened by Google's hesitation) while enjoying ample resources from Microsoft and other investors.
The so-called entrepreneurial mindset is not just about the courage and flexibility of a business, but also includes a strong desire to achieve great things, akin to a heroic journey facing immense challenges. The mission of a startup should be to create something extraordinary, rather than mass-producing predictable high-quality products, even if the company could easily aim for the latter. Therefore, startups actively seek opportunities and adopt flexible collaboration methods. To achieve their goals, they discard existing organizational structures and biases, no matter how long-standing and revered these conventions may be.
E-commerce giant Amazon has demonstrated a startup-like mindset in embracing artificial intelligence. A decade ago, as the technology developed, the company saw an opportunity to create 'smart speakers' as a new internet interface. At the time, Amazon lacked expertise in AI, but it acquired the necessary resources through hiring, acquisitions, and internal development, successfully launching the Echo speaker and the Alexa digital assistant. The outcome went far beyond offering customers more product choices—it opened new avenues for creating value and jobs across many fields. Beyond Alexa, Amazon is actively investing in other AI projects, with CEO Andy Jassy stating that AI technology has the potential to 'enhance the customer experience in every way.'
Companies cannot adopt all these driving factors overnight, but they can start moving in this direction by earnestly exploring new possibilities. For individuals seeking career goals and meaningful achievements, most of these drivers can also apply on a personal level. They can take bold steps, maintain an entrepreneurial mindset in the workplace, and meet other necessary conditions. Like companies, employees can actively engage in the AI industry by acquiring the required skills and experience, which not only safeguards their careers but also empowers them at a higher level.
Much of corporate effort is focused on producing reliable products at lower costs. To prevent large-scale unemployment, we now need more companies to break this routine and accelerate AI development. The greatest danger at present is that most businesses will play it safe, making only singular investments to meet short-term gains.
Without the courage to innovate, human society cannot thrive. If ancient humans had feared fire and avoided harnessing its power due to the risk of burns, humanity might have gone extinct. We believe this attitude toward new things also applies to AI technology. Rather than succumbing to fear, we must harness the power of AI. Everyone must master this technology to collectively achieve a higher standard of living.