"Firms don't appear to be replacing workers with AI on a significant scale," the firm said. It suspects some are trying to "dress up layoffs" as good news.
Firms are trying to dress up layoffs as a good news story rather than bad news as attributing staff reductions to AI adoption conveys a more positive message to investors.
“If AI were already replacing labour at scale, productivity growth should be accelerating
There are headlines that suggest high productivity numbers, but tech capex now being 2% of GDP can be a big mask for those headlines. The way productivity is measured is sales divided by employment costs. Auto sector or insurance companies don’t have a genuine productivity boost if cars and insurance just cost more without employees making more of it.
Overpaying for GPUs, power, and datacenter construction are fairly low employment activities, GPUs being made overseas at extreme revenue per kg is something that would especially skew productivity numbers. Any growth in datacenter revenue is also something accomplished with few employees, and their customers are not necessarily boosting their revenues/employee.
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Important theory.
There are headlines that suggest high productivity numbers, but tech capex now being 2% of GDP can be a big mask for those headlines. The way productivity is measured is sales divided by employment costs. Auto sector or insurance companies don’t have a genuine productivity boost if cars and insurance just cost more without employees making more of it.
Overpaying for GPUs, power, and datacenter construction are fairly low employment activities, GPUs being made overseas at extreme revenue per kg is something that would especially skew productivity numbers. Any growth in datacenter revenue is also something accomplished with few employees, and their customers are not necessarily boosting their revenues/employee.