Hinton says tech giants need job cuts to profit from AI
Nobel laureate Geoffrey Hinton doubled down on his warnings about artificial intelligence's impact on employment this week, telling Bloomberg TV that tech giants cannot profit from their massive AI investments without replacing human workers with cheaper alternatives.
"I think the big companies are betting on it causing massive job replacement by AI, because that's where the big money is going to be," Hinton warned during his appearance on Wall Street Week Friday. The computer scientist, known as the "Godfather of AI" for his pioneering work in machine learning, expressed skepticism that AI will follow historical patterns of technological disruption that both created and destroyed jobs.
Massive AI Spending Accelerates
The warning comes as major tech companies dramatically increase their AI-related capital expenditures. Microsoft, Meta, Alphabet, and Amazon are projected to boost spending from $360 billion this year to $420 billion next fiscal year. OpenAI alone has announced infrastructure deals totaling $1 trillion with partners including Nvidia, Broadcom, and Oracle.
When asked whether such investments could generate returns without eliminating jobs, Hinton replied: "I believe that it can't. I believe that to make money you're going to have to replace human labor".
Evidence supporting Hinton's concerns is mounting. Job openings have declined roughly 30% since ChatGPT's November 2022 launch, even as the stock market surged 70% during the same period. Stanford University research found that workers aged 22-25 in AI-exposed occupations experienced a 13% to 16% decline in employment since late 2022, while older workers in the same fields saw job growth.
Amazon Cuts 14,000 Jobs Amid AI Push
This week, Amazon announced it would eliminate approximately 14,000 corporate positions, marking one of the largest layoffs in company history. While CEO Andy Jassy attributed the cuts to "culture" rather than AI, a June memo from him predicted a smaller corporate workforce "as we get efficiency gains from using AI extensively across the company".
Despite potential negative consequences for workers, Hinton acknowledged AI's benefits in healthcare and education. However, he emphasized that the fundamental issue lies not with AI itself, but "on how we organize society".
The research reveals a complex employment landscape where AI is primarily affecting entry-level positions while experienced workers often benefit from increased productivity tools, suggesting the technology's impact will be highly uneven across the workforce.
