AI risks ‘substantial disruption’ to job markets, warns IMF official

A top IMF official has warned of the risk of “substantial disruption to labor markets” stemming from generative artificial intelligence, as he called on policymakers to quickly draw up rules to govern the new technology.

In an interview with the Financial Times, Gita Gopinath, the fund’s second-in-command, said AI breakthroughs, especially those based on big-language models like ChatGPT, could increase productivity and economic output, but warned that the risks ” were very large”.

“There is tremendous uncertainty, but that . . . does not mean that we have enough time to wait and think about future policies,” said Gopinath, the IMF’s first deputy managing director.

He added: “We need governments, we need institutions and we need policy makers to move quickly on all fronts, both in terms of regulation but also in preparing for potentially substantial disruptions to labor markets Go ahead.”

Gopinath’s comments on AI, his most comprehensive to date, follow a series of warnings over the new technology’s potential to result in social upheaval if workers lose their jobs.

Gopinath said automation in manufacturing served as a cautionary tale in previous decades, when economists wrongly predicted that car production lines would drive vast numbers of workers to better opportunities in other industries.

“The lesson we’ve learned is that this was a very bad assumption,” she said. “It was really important for countries to make sure that people . , , Those left behind were actually being matched with productive work.”

Gopinath said that failure to do so had contributed to the “backlash against globalization” following the Great Financial Crisis.

To avoid repeating history, governments need to strengthen “social safety nets” for workers who are affected while promoting tax policies that do not reward companies that replace workers with machines. .

Meanwhile, she warned policy makers to be cautious if some corporations emerge with an unenforceable position in the new technology. “You don’t want to give an unfair advantage to companies with large amounts of data and computing power,” Gopinath said, also citing privacy concerns and AI-fueled discrimination.

The European Union has already proposed new legislation to regulate AI, which it said was an “encouraging start”, while the Biden administration is in the process of drawing up regulatory plans.

The push for coordinated global action comes amid fresh evidence that generative AI, once more widely adopted, could be hugely transformative.

In a speech later on Monday, Gopinath cited several studies that have tried to measure the economic impact, including a Goldman Sachs report that estimated 300 million jobs could be automated, leading to Higher productivity and global production could increase by 7 percent over a decade. ,

“AI could be as disruptive as the Industrial Revolution was in the time of Adam Smith,” she told an audience in Scotland at an event commemorating the economist.

Gopinath said new technologies such as ChatGPT had “broad appeal” and needed to be taken more seriously than other advances, such as self-driving cars that were billed as game changers.

“Usually when you see a technology behaving like general-purpose technology . . . that’s when we think it can have a broad impact on the economy,” he said.