Heard an interesting news story...

[Bruce Woodruff]

Listening to a radio news show a couple days ago and heard a disturbing story/opinion piece. They were talking about AI, and the takeaway was this - within 3 years, 50% of all 'white-collar' jobs will be gone. One half....that's a lot of unemployed people.

So 2 questions, let's say this actually happens.. 1) How does this affect the economy/country as a whole and more specifically, 2) What happens to the Real Estate market?

[Kevin Sobilo]

@Bruce Woodruff, a few thoughts:

1. As someone who spent decades doing software development, I don't think this will happen at all. 

2. First off competition! The massive AI build-out happening now is EXPENSIVE. Eventually those companies need to make their money. That means while initially their services may be cheap/free eventually they will start charging more and more ESPECIALLY as the winners are sorted out from the losers. 

The rising cost of AI will mean that many companies cannot justify giving up their employees. 

3. Institutional knowledge! White collar workers especially hold a lot of knowledge specific to their organization beyond what AI's skillset in an area like programming might easily absorb. 

Yes, this will lessen over time, but it does mean that organizations won't be quite so fast to unload half their employees. The change is likely to be more gradual. 

4. It takes NEW white collar employees with new skill sets to bring AI into use within the organization, so while you might replace 50% of customer service jobs with AI, you will create a small number of higher paid specialists needed to make that happen, maintain, and support it within the organization. 

5. White collar employees are often entitled to severance packages not just unemployment payments. So, since the cost to get rid of them is higher, more of these folks may exit by attrition and more slowly than entry level worker layoffs. 

6. AI is coming for blue-collar workers as well, a simple example is the robot dog that patrols commercial/industrial sites. Instead of needing several guards patrolling, you only need one in a command center managing the robot dogs. 

7. Booms and followed by a bust! So, while AI is here to stay, it will not be straight line progress to the sky forever. With the rate things are booming at the moment, there likely will be some busts that stall progress at times and make companies re-evaluate. 

For example, it is a HUGE investment for a company to invest in a particular AI product, then to train and integrate it into their processes. With the boom, some companies will FAIL! What will these customers of failed companies do after a failure when they have invested so much?!? With employees, its EASY to replace 1 bad employee but when their chosen AI company fails, it will be HUGELY impactful for them.