AI Is Here, and a Quiet Havoc Has Begun

Automating knowledge work is a good thing, although it will displace some workers. Consultants are hired to make more companies more productive. If LLMs can give good business advice, that will increase access for smaller companies.

https://archive.is/E3kxj

'This summer the knowledge settled in about where we are with artificial intelligence. Almost everyone is rattled by the speed of its development. The story is no longer “AI in coming decades will take a lot of jobs” or “AI will take jobs sooner than we think.” It is “AI is here and a quiet havoc has begun.”

Jobs growth in July was lower than expected, the May and June jobs numbers were revised downward, and news reports on this mentioned various causes—tariffs, general economic uncertainty and, lower down, AI.

But all sorts of feature reporting puts AI higher up. Last week Noam Scheiber in the New York Times reported economists just out of school are suddenly having trouble finding jobs. As recently at the 2023-24 academic year, said a member of the American Economic Association, the employment rate for economists shortly after earning a doctorate was 100%. Not now. Everyone’s scaling back, government is laying off, big firms have slowed hiring. Why? Uncertainty, tariffs and the possibility that artificial intelligence will replace their workers. Mr. Scheiber quotes labor economist Betsey Stevenson: “The advent of AI is . . . impacting the market for high-skilled labor.”

That’s only economists, not beloved in America, we probably have enough. Here’s another unbeloved group. This week Journal reporter Chip Cutter had a piece titled “AI Is Coming for the Consultants. Inside McKinsey, ‘This Is Existential.’ ” If AI can crunch numbers, analyze data and deliver a slick PowerPoint deck in two seconds, what will the consulting firm do to survive? Rewire its business. Smaller, leaner teams; let AI build the PowerPoint. McKinsey’s global managing partner, Bob Sternfels, said that in the future the company will likely have one AI agent for every human employee. It’s already reduced head count.'