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IBM CEO Says AI Will Impact White-Collar First – But There Is A Silver Lining!

By TD NewsDesk

TD NewsDesk

Updated on Mon, Aug 21, 2023

Overall Rating
Will white-collar jobs be the first to feel the effects of AI automation?

According to IBM's CEO, Arvind Krishna, it certainly does seem so!

Let's get into the specifics and find out what exactly the buzz is all about!

Companies are scrambling to release their own versions of large-language models in response to the increasing demand for artificial intelligence-powered chatbots like OpenAI's ChatGPT.

Before the ChatGPT craze, IBM was already investing, developing and creating its own AI platform through a supercomputer codenamed "Watson" between 2004 and 2011.

IBM CEO and chairman Arvind Krishna said on CNBC's "Squawk Box Asia" that thanks to the rapid progress in AI, generative AI and large language models may "make every enterprise process more productive." He also said that white-collar work is particularly vulnerable to automation in the early stages.

“That means you can get the same work done with fewer people. That’s just the nature of productivity. I actually believe that the first set of roles that will get impacted are — what I call — back office, white-collar work,” said Krishna.

He added that there is “a disinflation in the demographics,” leading to a decline in the size of the working-age population. “So, you need to get productivity. Otherwise, the quality of life is going to fall. And AI, I think, is the only answer we got.”
Wait, maybe things won’t be as bad as they seem.

What if AI turned out to be the indispensable office companion we always wanted?

How Has IBM Been Putting AI To Use?

According to IBM's 2022 annual report, the company has over 288,300 people in over 175 different countries between itself and its fully-owned subsidiaries.

IBM WatsonX, an AI development environment that facilitates the creation, training and deployment of machine learning models, was introduced in May. Watson Health was a data and analytics subsidiary of IBM that had been unprofitable for years prior to its sale.

Bloomberg also reported  that IBM would halt hiring for positions it believes can be automated. Krishna estimated that at the time, AI and automation may replace around 7,800 positions in fields such as human resources. CNBC reported in January this year that IBM has decided to lay off 3,900 workers.

“So what I said was, we are not going to backfill those [white-collar] roles for the next five years. But you get digital labor, or AI bots augmenting and working alongside their fellow humans doing that work. So that is where the 7,800 [number] came from,” Krishna told CNBC’s Martin Soong.

“It’s absolutely not displacing — it’s augmenting. The more labor we got, especially if it’s not human-based at all, we can create more GDP. We should all feel better about it,” said Krishna.

What Are IBM's Future Plans For Implementing AI?

Krishna frequently emphasized the value of AI for enhancing HR, customer service, automation and other business processes.

Krishna cited the 2011 "Jeopardy!" victory of IBM's Watson supercomputer as an illustration of how "hundreds of thousands of people and a lot of trained PhDs" may be mobilized to "create one model to do one thing."

“With large-language models, you use a lot of data but no labeling. So very few people produce a map model. And now, every weekend, you can create a new instance for a new task. That means your cost of a model for a task has come down by almost 100 times,” said Krishna.

“That is amazing. And that is what gives us confidence that this is the moment to go commercialize and modify.”
With the rise of AI, the threat of potential job loss remains significant. Yet, as claimed by IBM's CEO, white-collar workforces could be assisted by AI soon.

The question remains: will AI replace human workers? Let us know your thoughts in the comments section below!

First published on Mon, Aug 21, 2023

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