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This is another productivity multiplier. We have seen how similar changes have happened in the past during mechanisation, industrialisation of production etc. The problem is that AI is not good enough today. You still need people to supervise and these people need to understand the fine details of what is required. AI might be used to replace some jobs but what i thing will mostly be used for is to make existing production a lot more efficient.
Right, you still need a human in the loop to make sure that whatever AI is producing is actually what's needed. However, you just don't need as many people at that point. Here's another example of companies reducing staff because AI can do most of the work.
There's also a problem with AI largely replacing entry level roles. Junior developers, writers, artists, and so on. Companies will keep their more experienced staff, but they will have little incentive to invest in junior workers and train them up.
Another factor currently is the global recession. There is a huge incentive for companies to lay people off because employees are the biggest cost for the business. We were already seeing layoffs happening in tech sector before AI services started popping up. This will only accelerate things.
Finally, it's worth noting that AI is improving rapidly. A couple of years ago, nobody would've believed you if you told them that AI could do the things ChatGPT is doing right now. In a few years, things will likely advanced far beyond what anybody can imagine today.
Generally I agree with most you say, there are going to be issues for sure. One of the trickiest issue tech companies will have is hiring senior engineers when they do not hire junior engineers. They have already tried that with interesting results. If you do not train junior people you end up not having senior people.
I'd argue the whole issue isn't really with AI but with the pressures that capitalist economic system creates. Companies exist to create profit for their owners, and that means maximizing profit while minimizing costs. Employees are obviously one of the biggest costs for the business, so it makes sense for companies try to minimize their staff as much as possible.
Perhaps it's time to rethink the nature of work now that AI systems being able to automate large range of jobs. There is no reason why people should be forced to work for the sake of work. The nature of work should be such that it creates social value for society. Maybe we've now reached a point where everyone doesn't need to have jobs to live.