AI Job Apocalypse? Nobel Laureate Disputes Dire Forecasts

Amid mounting concern that AI will soon obliterate vast swaths of human employment, one of the world’s leading economists is urging caution.

In a 2024 paper and recent interview, MIT economics professor and Nobel laureate Daron Acemoglu contends that the macroeconomic impact of AI on jobs is far more limited and uncertain than many tech executives and market analysts claim.

“Forget overnight transformation,” Acemoglu said. His forecast? Only about 5% of tasks are likely to be automated over the next decade, and AI may contribute just 1% to global GDP in that time.

This sober assessment stands in stark contrast to recent proclamations from industry leaders.

Anthropic CEO Dario Amodei made headlines when he told Axios that AI could eliminate half of entry-level, white-collar jobs and lead to an overall 10% to 20% unemployment rate over the next five years.

Meanwhile, headlines about AI-driven layoffs at firms like IBM, Duolingo, Dropbox, and Business Insider have fueled public anxiety. IBM has laid off thousands of workers as AI boosts efficiency. Duolingo cut a portion of its contractor workforce as it invested in AI to generate language content. Business Insider, owned by Axel Springer, cut 21% of jobs as it goes all in on AI.

Yet Acemoglu argues that such alarmist views lack grounding in economic data.

In his April 2024 paper, The Simple Macroeconomics of AI, he lays out a task-based framework to analyze AI’s true impact. The central finding: Even with optimistic assumptions, AI-driven total factor productivity growth is unlikely to exceed 0.71% over the next 10 years. Accounting for the fact that many tasks are “hard-to-learn” and context-dependent, that estimate falls to just 0.55%.

“The industry has not produced applications that are critical for the production process or for generating new goods and services that are going to be hugely valuable,” Acemoglu said. Compared to the early days of the internet when there was a lot of hype, “it was clear how the internet was going to change everything.”

The way people communicated was completely transformed, it introduced a lot of new goods and services, it provided platforms for people to come together for recreation and other purposes, Acemoglu said. But “those things are not clear yet for AI.”

AI vs. the internet revolution

Instead, AI’s impact has so far been narrow and concentrated in predictable, repetitive tasks found in fields like software testing, basic accounting, and customer support. That reality is borne out by establishment-level data.

In a separate paper, AI and Jobs: Evidence from Online Vacancies, Acemoglu and his co-authors found that while firms adopting AI reduced hiring in non-AI positions, the overall effect on aggregate employment and wages was still too small to be detected at the industry or occupational level.

In other words, even where job substitution is happening, it remains limited in scale.

Acemoglu does not deny that AI will affect labor markets. But he stresses that the direction and magnitude of those effects depend on how AI is developed and deployed. Most business leaders, he said, are investing in AI blindly: “They are doing so because they are under tremendous pressure, because every day they hear from management consultants, from the newspapers, from podcasts that your competitors are investing big time in AI. If you’re not, you’re falling behind.”

“That’s not the way to create a successful business. You never create a successful business because you think your competitors are investing and you should do it not to fall behind,” Acemoglu added.

Crucially, Acemoglu believes that many of the new tasks AI is enabling may have questionable or even negative social value – such as deepfake generation or algorithmic manipulation in advertising. In his model, those tasks contribute to GDP but could harm overall welfare.

Ultimately, Acemoglu’s message is one of nuance in a debate dominated by extremes. While some in Silicon Valley dream of an imminent AGI revolution, and others brace for a jobless future, he sees AI as “a great tool to augment the capabilities of your workforce and yourself.”