AI's $16 Trillion Windfall: Boon for Stocks, Bane for Workers

According to a recent analysis by Morgan Stanley, artificial intelligence (AI) could be a $16 trillion gift to the stock market. The strategists predict that the productivity gains and cost-cutting enabled by AI could add $13 to $16 trillion in value to the S&P 500 index, potentially increasing its market capitalization by 29%.

However, this AI-driven value creation could also spell trouble for human workers. The bank estimates that AI adoption could impact around 90% of existing jobs, leading some employees to upskill or change careers entirely. In fact, Goldman Sachs has forecasted that AI could automate around 300 million full-time jobs globally, with roles in administrative and legal sectors being most at-risk.

Looking ahead, the impact of AI on the job market is expected to be significant. Antropic's CEO, Dario Amodei, believes AI could eliminate half of entry-level white-collar jobs over the next five years, potentially causing the unemployment rate to spike as high as 20%. While AI may create new roles, such as "AI supply chain analyst" and "AI ethicist," the ability of workers to be re-skilled will be crucial in determining how quickly they can be absorbed back into the labor force.