IMF warns of massive workforce disruption due to artificial intelligence

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• Israeli Prime Minister Benjamin Netanyahu has dissolved the war cabinet he formed after the October 7 Hamas attack following the resignation of two of its members.

• Ukraine has called on international bondholders to accept deep cuts to more than $20 billion worth of debt to help finance the country’s war effort. His government faces a tight deadline to secure the debt restructuring it needs to continue receiving financial assistance from the IMF.

• EU leaders are tonight set to approve Ursula von der Leyen for a second five-year term as European Commission president, ahead of a formal stamp later this month.

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Good evening.

The IMF today joined a growing list of organizations warning of the implications of generative artificial intelligence, arguing that it raised “deep concerns about massive disruption to the workforce and growing inequality”.

Governments must do more to prepare the workforce, such as improving unemployment insurance, the IMF said, noting that unlike the disruptive technologies of the past, higher-skilled occupations are also at risk.

Generative artificial intelligence – the ability of computers to generate text or images from human prompts – first gained mass attention with the launch of OpenAI ChatGPT in 2022, fueling a boom in global technology stocks.

The question of how the technology is regulated is also coming to the fore, sparked by the EU’s AI law and initial reactions in the US that have sparked a backlash from Big Tech. Silicon Valley is particularly upset about California’s AI safety law, which calls for a “kill switch” to turn off powerful AI models.

Big Tech’s AI business is also under fire from U.S. antitrust authorities, who fear the transformative technology is being concentrated among a few deep-pocketed companies. Meanwhile, the likes of OpenAI are ramping up their lobbying efforts.

At the same time, governments are vying for a piece of the action. Today we report on how India is offering incentives to Big Tech to spend billions on infrastructure to make the country a major consumer and exporter of artificial intelligence. Argentina, meanwhile, is trying a different approach, pitching itself as a low-regulation AI hub for companies hampered by US and EU restrictions.

The impact on the labor market was at the fore. The IMF estimated in January that AI would affect nearly 40 percent of jobs worldwide, while Goldman Sachs said AI could replace 300 million full-time jobs while creating more and increasing productivity.

If organizations can retrain workers for the AI ​​world in skills such as “prompt engineering” – the process of writing the most effective text prompts to generate the desired response from an AI application – productivity gains can be huge. One AI software company says global productivity improvements from generative AI could be worth $1.75 trillion a year by 2033.

Furthermore, sweeping predictions of the job apocalypse (see Elon Musk’s claim that artificial intelligence will make all jobs obsolete) are somewhat exaggerated, writes FT innovation editor John Thornhill.

Such dystopian predictions ignore our past experiences with new technologies and often confuse technological feasibility with economic viability, writes Thornhill. And while it’s easy to see the jobs that AI will disrupt, it’s hard to imagine the ones that will be created: many of today’s jobs didn’t exist a few decades ago—in medicine, software, or solar energy, for example. example.

But it will still be incumbent on governments to adopt an “agile” approach that prepares them for “highly disruptive scenarios”, according to the author of today’s IMF report. And given the global reach of artificial intelligence, “it will indeed be more important than ever for countries to work together,” the author concludes.

You need to know: the UK and European economy

Rachel Reeves, Britain’s new chancellor, should Labor win the general election, told the FT she would seek to improve the UK’s and EU’s terms of trade. In an interview outlining her preparations for government, Reeves said she wanted to secure billions of pounds of investment through an early international summit.

Oil and gas bosses said Labor’s pledge to scrap tax breaks in the North Sea threatened their investment in the basin, with several projects already on hold. While Labour’s plan to stop new licenses being issued was expected by industry, several companies told the FT that they were now unsure about the profitability of projects they already have licences.

Of course, the big question for many people is: Will the election leave me? better? FT writers examine party manifestos to find out which will have the biggest impact on your personal finances.

Join us on 5 July at 1pm UK (GMT+1) as Political Fix podcast host Lucy Fisher breaks down the election result with Inside Politics author Stephen Bush, political editor George Parker and commentators Robert Shrimsley and Miranda Green. Register and put your question in the panel.

AND European central bank official rejected the idea of ​​using emergency powers to intervene in the French bond market after the announcement of early parliamentary elections caused a debt selloff. French stocks just suffered their worst week since 2022 on fears of a populist poll victory.

You need to know: the global economy

China has launched an anti-dumping investigation Import of pork from the EU, raising trade tensions just days after Brussels announced it would impose tariffs on electric vehicle supplies from China. The fresh data underscored the challenges facing China’s policymakers as industrial production growth slowed and property prices fell sharply.

Australia’Meanwhile, trade with China has hit record levels despite wider tensions in the region as relations between the two countries recover from a devastating dispute sparked by the pandemic.

Pakistan, the fourth-largest rice exporter, is selling record amounts to world markets as it benefits from trade restrictions imposed last year by India, the world’s largest. In a country plagued by weak economic growth and double-digit inflation, the windfall is much needed.

You need to know: Shop

Global defense companies They are hiring at the fastest pace since the end of the Cold War as order books overflow, according to an FT survey. Governments around the world have increased military spending since Russia’s all-out invasion of Ukraine and amid widespread geopolitical tensions

The salary of American bosses growing at the fastest rate in 14 years, according to official figures, which critics say risks worsening social inequality. A key example is Tesla boss Elon Musk’s victory last week in securing a $56 billion stock option package – the largest in US history.

Chile’s state-owned Codelco, the largest in the world copper miner, said it could reverse a severe slump in output, which has hit 25-year lows just as global demand surges. The CEO of Freeport, the third-largest copper producer, said consolidating the oil and gas industry is critical to the transition to clean energy.

Japanese TDK claimed a breakthrough in its tiny solid-state batteries. Apple’s supplier said the new material provides an energy density — the amount that can be squeezed into a given space — about 100 times greater than its current battery.

The world of work

Companies have been busy trumpeting their enlightened approach mental health in a workplace. But a new report suggests that fear of discrimination means many workers are still nervous about revealing the nature of their problems.

One of the drivers of mental illness is excessive working hours, especially in industries such as banking, where both senior and junior staff are feeling the burden of increasing workloads and demands amid intense competition.

It can discriminate working class accents when it comes to Britain’s top jobs finally on the way out? Big banks and city law firms are among those employers trying to tackle the problem,

Business leaders are increasing management efforts Gen Z workersa cohort, according to a new survey, that is more concerned with social and political causes.

Have you ever thought about WFH (work from hairdressers, It is)? Salons are busy installing outlets and creating quiet areas for remote work in an effort to attract customers.

Some good news

Today is World Day to Combat Desertification and Drought. But amid dire warnings about the state of the planet, there is a glimmer of hope: sustainable energy sources, including solar and wind power, can help reverse the process, the UN says.