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Over the past year, we have witnessed dramatic advances in the development of AI and huge shifts in public perception of the technology. Chatbots like OpenAI’s ChatGPT and LLMs like GPT-4 have demonstrated remarkable abilities to communicate fluently and perform at or near the highest level on a wide range of cognitive assessments. Companies that are an integral part of the AI ecosystem (like Nvidia) have seen their market capitalization skyrocket. Talk of an AI arms race among tech giants like Google and Microsoft is rife.
For all the excitement surrounding AI, there was no shortage of consternation – from worries about job displacement, the spread of misinformation and AI-powered cyberattacks to fears of existential risks. While responsibly testing and deploying AI is essential, we are unlikely to see significant regulatory changes in the next year (which will widen the gap between leaders and followers on field). Big data-rich AI leaders are likely to see significant upside while competitors that lag behind the technology – or companies that provide AI-threatened products and services – risk losing substantial value.
There will be winners and losers in the race for AI, but AI pessimists overlook the creativity and productivity the technology will unleash. Yes, job losses are inevitable, but so are job gains. The most successful companies won’t fight the tide of change – they’ll figure out how to participate in one of the greatest technological revolutions we’ve ever seen.
Innovation will counteract dislocation
There is no doubt that AI will replace many roles that exist today – data entry clerks, content creators, paralegals, customer service agents and millions of other workers could find that their career is about to take an unexpected turn. Accenture expects 40% of all working hours to be affected by LLMs alone, as “language tasks account for 62% of total employee working time”. The World Economic Forum’s Future of Jobs 2023 report predicts that the proportion of jobs performed by machines will rise from 34% to 43% by 2027.
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That said, it is always a good idea to bank on human creativity and resilience. As certain roles become redundant, there will be an increased demand for AI auditors and ethicists, fast engineers, information security analysts, and more. There will also be a growing demand for AI-focused educational resources. PwC reports that a remarkable 74% of workers say they are “ready to learn a new skill or completely retrain to remain employable” — an encouraging sign that employees recognize the importance of adapting to new technological and economic realities. Perhaps that’s why 73% of American workers believe that technology improve their job prospects.
Companies should capitalize on these sentiments by focusing on talent mobility and professional development, which will simultaneously prepare their workforce for the age of AI and improve retention in a stubbornly tight job market. . Beyond in-house training, we are seeing the emergence of third-party educational services focused on AI, data science, cybersecurity, and many other up-and-coming topics – a trend that is expected to accelerate in the years to come. Amid all the headlines about AI job losses, it’s important to remember just how adaptable humans can be.
AI risk management will be a key priority
In addition to the economic shocks that will be caused by AI, the technology poses many other dangers that businesses and consumers will need to consider in the years to come. AI-powered cyberattacks, issues of bias and transparency, copyright infringement, and the large-scale production of inaccurate information are all risks that are becoming increasingly urgent. How we manage these risks will have far-reaching implications for the deployment and adoption of AI in the years to come.
Take the potential role of AI in cyberattacks. According to Verizon’s 2023 Data Breach Investigation Report, nearly three-quarters of data breaches involve a human element, which is why cybercriminals often rely on social engineering attacks such as phishing. LLMs are capable of producing unlimited amounts of coherent and compelling text in an instant, which could give cybercriminals a powerful tool to scale up phishing attacks (these attacks depend on convincing victims to click on malicious content with realistic text). Check Point Research has previously identified “attempts by Russian cybercriminals to circumvent OpenAI restrictions”.
Companies will increase their investments in cybersecurity to keep pace with these developments, and we are likely to see major AI-based cyberattacks in the near future. It will be necessary to update approaches to cybersecurity training to account for the threat posed by AI. Phishing attempts, for example, will be harder to spot because cybercriminals will use LLMs to produce compelling (and less error-laden) text. The companies best positioned to succeed during the AI revolution are those that consider the risks now and update their compliance protocols, HR policies and cybersecurity platforms to account for the dangers of AI while pulling part of its advantages.
AI will fundamentally transform the business environment
ChatGPT reached 100 million monthly active users in just two months, making it the fastest growing consumer app of all time. While large tech companies with access to massive amounts of data and leading minds in the field will have significant advantages as frontrunners, many startups will be developing innovative implementations for AI in the near future. The economic impact of AI will go far beyond the development of the technology itself.
For example, the fusion of AI and robotics – as well as new collaborations between mechanical, electrical and software engineers – will significantly reduce innovation cycle times, error rates and costs. Over the next year, AI-driven disruption will quickly escalate: workforces will change, there will be drastic swings in market share and valuations, and slow AI adopters will quickly lose of traction. There will also be many false starts – while some companies will generate stunning returns, others will fall into misdirected hype and hit dead ends. The most successful startups will find a way to capitalize on the network effects around data acquisition and early-stage partnerships.
It’s impossible to know exactly what the business landscape will look like as AI rapidly improves and proliferates. But one thing is certain: forward-thinking companies are right to focus on AI now – they just need to be aware of the risks as well as the potential rewards.
Mark Sherman is Managing Partner at Telstra Ventures.
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