Source: Fortune
Summary
Mark Zandi, chief economist at Moody’s Analytics, says American companies are approaching a “Cortés moment” with artificial intelligence, where they’re making irreversible commitments that could reshape the labor market. Zandi believes companies are investing heavily in AI, cutting jobs, and making structural bets, which could lead to a transformation of the labor market. He warns that the impact of AI is starting to “kick in” across the economy, and it’s already visible in hiring, with tech jobs falling and layoffs hitting their highest level since 2009.
Our Reading
The numbers tell one story.
Block’s 40% workforce cut is a sign of things to come. Zandi suspects AI is serving as a convenient cover story, but the effect on the labor market may be the same. The financial infrastructure of this commitment is already in place, with the ten largest AI companies on track to issue over $120 billion in bonds. Zandi warns that companies are making a Cortés-like commitment to AI, burning their boats and leaving no turning back.
The labor market has one remaining buffer: healthcare, which has been the economy’s primary job-creation engine.
Author: Evan Null
