Artificial intelligence could render many jobs such as cashiers and drivers obsolete — leading to widespread social unrest, according to a senior Wall Street finance executive.
Armen Panossian, a co-CEO of the Los Angeles-based investment firm Oaktree Capital Management, told Bloomberg News that AI poses “the biggest risk” because while it “clearly has the potential for very large economic gains,” it will also have “societal impacts.”
“Millions of people could be out of jobs. So who’s going to retrain those people?” Panossian told Bloomberg News.
“If we don’t figure that out, there could be social unrest.”
Panossian said that continuing to ignore the risks will result in “a bill to pay with respect to employment and with respect to people who rely on paycheck-to-paycheck jobs, who’ll find themselves untrained and not ready for the new economy.”
“And we will be forced as a society to either have social unrest or have a welfare state,” he added.
His sentiments echo dire predictions that were included in reports and studies compiled by academics and experts who sought to gauge the impact of AI on the future job market.
Last year, Goldman Sachs warned generative AI — which is trained on different sets of data to learn pattern recognition — could impact as many as 300 million full-time jobs globally.
In 2020, the World Economic Forum published a study which said that AI, automation and other technologies could lead to the displacement of as many as 85 million jobs worldwide by 2025.
A 2017 report by consulting firm McKinsey estimated that up to 800 million jobs worldwide could be automated by 2030 — resulting in somewhere between 400 million and 800 million people needing to either change jobs or acquire new skills.
“The risk is if we don’t do anything about it now to retrain some of these people or to prepare for a post-AI employment landscape, we’ll have issues with a deepening divide between the haves and have-nots, the wealthy and the paycheck-to-paycheck people,” Panossian said.
“And that will mean a considerable amount of harm to a lot of people who don’t expect it to be coming their way.”
He also warned investors who are currently bullish on AI stocks that those assets may be overvalued and that the market could be rife with speculation — comparing it to the dot-com bubble of the late 1990s and early 2000s.
Panossian said that while “the gains are clear in terms of their potential, the timing of them is impossible.”
“And if that timing takes a lot longer than investors expect, I would expect to see a pretty violent resetting of valuations and potentially some losses for investors along the way.”
Panossian cautioned investors “not to get over our skis and get too overexposed or too concentrated into AI because we do remember what it was like when the fiber optic boom was happening.”
