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February 21, 2024

According to a report by the McKinsey Global Institute, “generative AI” will add $4.4 trillion in value to the global economy annually, one of the more optimistic forecasts for the economic impact of the rapidly advancing technology.

Generative AI, including chatbots such as ChatGPT that can generate text based on prompts, could boost productivity by saving 60 to 70 percent of employee time through job automation, according to the 68-page report published earlier Wednesday. Half of all jobs will be automated between 2030 and 2060, the report said.

McKinsey had previously predicted that AI would automate half of all jobs between 2035 and 2075, but the power of generative AI tools — which took hold in tech late last year — accelerated the firm’s forecast.

“Generative AI has the potential to change the structure of work, empowering individual workers by automating some personal activities,” the report said.

The McKinsey report is one of the few to date that quantifies the long-term economic impact of generative AI. The report comes as Silicon Valley is gravitating toward generative artificial intelligence tools like ChatGPT and Google’s Bard, with tech companies and venture capitalists investing billions in the technology.

These tools — some of which can also generate images and videos and engage in conversations — have sparked a debate about how they will affect jobs and the world economy. Some experts predict AI will replace people’s jobs, while others say the tools can boost personal productivity.

Last week, Goldman Sachs released a report warning that artificial intelligence could disrupt workers’ work and that some companies would benefit more from the technology than others. In April, a Stanford University researcher and MIT researchers released a study showing that generative AI could increase the productivity of inexperienced call center operators by 35%.

Any conclusions about the technology’s impact are likely to be premature. MIT economics professor David Otter warned that generative AI “will not be as magical as it is claimed to be.”

“We’re really, really early days,” he added.

For the most part, economic studies of generative AI have not considered other risks of the technology, such as its potential to spread misinformation and ultimately escape human-controlled domains.

According to the McKinsey report, the vast majority of the economic value of generative AI is likely to come from helping employees automate tasks in customer operations, sales, software engineering, and research and development. Lareina Yee, a partner at McKinsey and the report’s author, said generative AI could create “superpowers” for highly skilled workers because the technology can summarize and edit content.

“The most profound changes we will see are people, and that will require more innovation and leadership than technology,” she said.

The report also outlines challenges that industry leaders and regulators need to address through AI, including concerns that content generated by these tools may be misleading and inaccurate.

Ms Yu acknowledged that the report was predicting the impact of artificial intelligence, but that “if you can capture a third of the technology’s potential”, “in the next five to 10 years, it would be quite remarkable.”



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