Global AI market is experiencing significant growth. Companies are adopting AI at an accelerated rate, with 72% reporting adoption in at least one business function in 2024, a significant increase from 55% in 2023, according to S&P Global.  This growth is being driven by various factors, including the potential for enhanced productivity, improved efficiency, and increased innovation across industries. 

Global spending on AI is projected to reach $632 billion by 2028, according to the IDC Worldwide AI and Generative AI Spending Guide.  16 technologies will be impacted: hardware (IaaS, server, and storage), software (AI applications [content workflow and management applications, CRM applications, ERM applications], AI application development and deployment, AI platforms [AI life-cycle software, computer vision AI tools, conversational AI tools, intelligent knowledge discovery software], AI system infrastructure software), and services (business services and IT services)

Grand View Research estimates that the global AI market, encompassing hardware, software, and services, will grow to over $1.8 trillion by 2030, compounding annually at 37%.

Barron’s says AI spending is surging, but certain job types are at risk according to CIOs.  On Wednesday, two major U.S. investment banks released reports based on surveys of chief information officers, or CIOs, at corporations that suggest rising spending plans for AI infrastructure.

• Morgan Stanley’s technology team said AI tops the priority list for projects that will see the largest spending increase, adding that 60% of CIOs expect to have AI projects in production by year end.  Military spending for AI applications by NATO members is projected to exceed $112 billion by 2030, assuming a 4% AI investment allocation rate. 
• Piper Sandler analyst James Fish noted 93% of CIOs plan to increase spending on AI infrastructure this year with 48% saying they will increase spending significantly by more than 25% versus last year.  Piper Sandler said that is good news for the major cloud computing vendors—including Microsoft Azure, Oracle Cloud, Amazon.com’s Amazon Web Services, and Google Cloud by Alphabet.
• More than half the CIOs in Piper Sandler’s survey admitted the rise of AI made certain jobs more vulnerable for headcount reduction. The job categories most at risk for cuts are (in order): IT administration, sales, customer support, and IT help desks. 

–>Much more on AI related job losses discussion below.

Executives’ confidence in AI execution has jumped from 53% to 71% in the past year, driven by $246 billion in infrastructure investment and demonstrable business results. Another article from the same date notes the introduction of “AI for Citizens” by Mistral, aimed at empowering public institutions with AI capabilities for their citizens, according to an artticle. 

This strong growth in the AI market is driven by several factors:

• Technological advancements: Improvements in machine learning algorithms, computational power, and the development of new frameworks like deep learning and neural networks are enabling more sophisticated AI applications.
• Data availability: The abundance of digital data from various sources (social media, IoT devices, sensors) provides vast training datasets for AI models, according to LinkedIn.
• Increasing investments: Significant investments from major technology companies, governments, and research institutions are fueling AI research and development.
• Cloud computing: The growth of cloud platforms like AWS, Azure, and Google Cloud provides scalable infrastructure and tools for developing and deploying AI applications, making AI accessible to a wider range of businesses.
• Competitive advantages: Businesses are leveraging AI/ML to gain a competitive edge by enhancing product development, optimizing operations, and making data-driven decisions. 

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• Some sources predict that AI could replace the equivalent of 300 million full-time jobs globally, with a significant impact on tasks performed by white-collar workers in areas like finance, law, and consulting.
• Entry-level positions are particularly vulnerable, with some experts suggesting that AI could cannibalize half of all entry-level white-collar roles within five years.
• Sectors like manufacturing and customer service are also facing potential job losses due to the automation capabilities of AI and robotics.
• A recent survey found that 41% of companies plan to reduce their workforce by 2030 due to AI, according to the World Economic Forum. 
• BT CEO Allison Kirkby hinted at mass job losses due to AI. She told the Financial Times last month that her predecessor’s plan to eliminate up to 45,000 jobs by 2030 “did not reflect the full potential of AI.” In fact, she thinks AI may be able to help her shed a further 10,000 or so jobs by the end of the decade.
• Microsoft announced last week that it will lay off about 9,000 employees across different teams in its global workforce.
• “Artificial intelligence is going to replace literally half of all white-collar workers in the U.S.,” Ford Motor CEO  Jim Farley said in an interview last week with author Walter Isaacson at the Aspen Ideas Festival. “AI will leave a lot of white-collar people behind.”
• Amazon CEO Andy Jassy wrote in a note to employees in June that he expected the company’s overall corporate workforce to be smaller in the coming years because of the “once-in-a-lifetime” AI technology. “We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs,” Jassy said.
• Technology-related factors such as automation drove 20,000 job cuts among U.S.-based employers in the first half of the year,  outplacement firm Challenger, Gray & Christmas said in a recent report. “We do see companies using the term ‘technological update’ more often than we have over the past decade, so our suspicion is that some of the AI job cuts that are likely happening are falling into that category,” Andy Challenger, a senior vice president at the Chicago, Illinois-based outplacement firm, told CFO Dive. In some cases, companies may avoid directly tying their layoffs to AI because they “don’t want press on it,” he said.
• In private, CEOs have spent months whispering about how their businesses could likely be run with a fraction of the current staff. Technologies including automation software, AI and robots are being rolled out to make operations as lean and efficient as possible.
• Four in 10 employers anticipate reducing their workforce where AI can automate tasks, according to World Economic Forum survey findings unveiled in January.

The long-term impact of AI on employment is still being debated, with some experts predicting that AI will also create new jobs and boost productivity, offsetting some of the losses. However, reports and analysis indicate that workers need to prepare for significant changes in the job market and develop new skills to adapt to the evolving demands of an AI-driven economy.

References:

https://my.idc.com/getdoc.jsp?containerId=IDC_P33198

https://www.grandviewresearch.com/press-release/global-artificial-intelligence-ai-market

https://www.barrons.com/articles/ai-jobs-survey-cios-619d2a5e?mod=hp_FEEDS_1_TECHNOLOGY_3

https://www.hrdive.com/news/ai-driven-job-cuts-underreported-challenger/752526/

https://www.lightreading.com/ai-machine-learning/telcos-are-cutting-jobs-but-not-because-of-ai

https://www.wsj.com/tech/ai/ai-white-collar-job-loss-b9856259

https://www.wsj.com/tech/ai/ai-white-collar-job-loss-b9856259

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