Early MIT research shows ‘Industrial Revolution-level large’ leap for workers using ChatGPT, generative AI
It’s early days in the rise of generative AI such as OpenAI’s ChatGPT and many in the market remain unconvinced of how it will play out for the economy and society, if amazed at its tricks.
Warren Buffett said in a recent interview with Becky Quick on CNBC’s “Squawk Box” that while ChatGPT did “wonderful things” writing a song for him in Spanish, and that “it’s an incredible technological advance in terms of showing what we can do,” he wasn’t convinced about the ultimate outcomes for the world. “I think this is extraordinary but I don’t know if it’s beneficial,” he said.
He did say the time-saving component of the tech is among the things that struck him.
“It can tell you that it’s read every book, every legal opinion. I mean, the amount of time it could save you, if you were doing all kinds of things, is unbelievable,” Buffett said.
That’s where CEOs in the generative AI space are focused.
OpenAI CEO Sam Altman told CNBC’s Julia Boorstin in an interview after being named the No. 1 company on the 2023 CNBC Disruptor list this year that the legal profession is a good example.
“What we’re hearing from customers using our API for legal companies is that it is totally transforming the way they work and the efficiency that any one lawyer can achieve and the accuracy, freeing people up to do more of what they do really well, and having this new tool to sort of give them as much leverage as possible,” Altman said.
That backs up what tech executives working directly with legal firms have previously told CNBC, with one saying of his legal and accounting firm clients that the sentiment right now is not that AI replaces lawyers, but “lawyers using AI are gonna replace lawyers. … Those professionals are going to be more effective, more efficient, they’ll be able to do more,” he said.
“That is a pattern we’re seeing again and again in many industries, and I’m super excited about it,” Altman said. “I do think it will touch almost everything.”
There isn’t much research yet to support these contentions, but early data does support the anecdotal evidence. A study released by MIT researchers in March showed that workers were 37% more efficient using ChatGPT.
Aidan Gomez, CEO of generative AI startup Cohere, which ranked No. 44 on this year’s Disruptor 50 list, pointed to that MIT study in a CNBC interview on Tuesday, saying, “The results are amazing,” he said. “That’s Industrial Revolution-level large. What the steam engine did for mechanical work, mechanical labor, this technology is going to do for intellectual labor.”
Gomez stressed in his comments to CNBC that the research had not yet been peer-reviewed. The authors of the MIT research, Whitney Zhang and Shakked Noy, were unable to comment due to the research currently being in the process of submission to a journal for peer review and publication.
Generative AI already begun to ‘noticeably impact workers’
Cohere’s platform lets developers and businesses of all sizes — even those without expertise in machine learning — integrate AI features like copywriting, search, conversational AI, summarization or content moderation in their company’s mobile app or service platform. Cohere works with AI customer service tech vendor LivePerson and has cloud deals with Google, Amazon Web Services and Oracle. Salesforce is an investor in the company, one of the first investments the customer relationship management tech giant made this year in a new AI fund. Gomez, along with co-founder Nick Frosst, came from Google Brain, an exploratory deep learning artificial intelligence team that’s now part of Google Research. While at Alphabet‘s Google, Gomez and other researchers helped to develop a new method of natural language processing — transformers — that enable systems to grasp a word’s context more accurately.
Comments like Gomez’s have contributed to the debate about whether AI replaces human labor or augments it. In sectors such as education, those fears are already running high. Gomez, in keeping with the outlook from most AI executives, is sticking to the “augmentative” script.
“What you’re going to see is humans are going to become ten times more effective at what they do,” he said.
He did say we should be wary of companies pointing to AI as the reason for layoffs in the future. He expects that excuse to be made.
But workers also have an advantage, for now, Gomez said: the time it will take to integrate AI technology into the existing technology stack.
“The reality is this will be a slow process over the next half-decade and there will be time to adjust, and change your own job,” he said. “And frankly, you’re going to love it.”
His comments made clear that workers better get used to it.
“We’re pre the real deployment, so I think simmering underneath the water is all this work going on to just transform every product, every single company.”
The MIT study provided more of a mixed assessment of the eventual outcomes for workers and the labor market. The increases in productivity among college-educated professionals performing mid-level professional writing tasks were qualified as “substantial,” and the study showed these workers executed tasks “significantly faster.” Initially low-performing workers, meanwhile, saw output increase and time on task decrease. But the MIT researchers weren’t sure that meant the outlook was good for preserving jobs.
“The experimental evidence suggests that ChatGPT largely substitutes for worker effort rather than complementing workers’ skills, potentially causing a decrease in demand for workers, with adverse distributional effects as capital owners gain at the expense of workers,” they wrote.
The researchers also pointed to limitations in their study. For one, the tasks were “relatively short, self-contained, and lack a dimension of context-specific knowledge, which may inflate our estimates of ChatGPT’s usefulness.” They could not draw conclusions about overall job satisfaction from the results, and, in capturing “only direct, immediate effects of ChatGPT on the selected occupations” they cannot account for many other factors that will weigh in labor markets and production systems as they adapt to new technologies like ChatGPT, or how AI will influence each occupation, task, and skill level.
The only conclusion they made with confidence in their paper: “For now, the evidence we provide suggests that generative AI technologies will — and have already begun — to noticeably impact workers.”
Watch the full CNBC Disruptor 50 interview above for more of this leading generative AI CEO’s views on how the next few years of work will play out.
Technology
Qualcomm says it expects $4 billion in PC chip sales by 2029, as company gets traction beyond smartphones
Qualcomm CEO Cristiano Amon speaks at the Computex forum in Taipei, Taiwan, June 3, 2024.
Ann Wang | Reuters
Qualcomm said on Tuesday that it expects its push into new markets to generate an additional $22 billion per year by 2029.
Of that amount, roughly $4 billion will come from PC chips, Qualcomm said at its investor day on Tuesday. The chipmaker just introduced PC processors earlier this year, when it released Snapdragon X for Windows devices.
The latest forecast marks an important milestone for Qualcomm CEO Cristiano Amon, who took over the company in 2021 with a promise to get past a reliance on smartphones. In fiscal 2024, Qualcomm’s handset business reported $24.86 billion in sales, about 75% of its entire chip business.
Qualcomm also said on Tuesday that automotive revenues would rise about 175% by 2029 to $8 billion, of which 80% is tied to contracts that have already been secured.
“We have been on this trajectory realizing that the technologies we have developed over the many years can be very relevant to a number of different industries beyond mobile,” Amon said at the investor event.
Another $4 billion in revenue will come from industrial chips and $2 billion will come from chips for headsets, a category Qualcomm calls XR. About $4 billion of the forecast is a catch-all for other chip sales, like those for wireless headphones and tablets.
Qualcomm shares are up 16% this year, trailing the Nasdaq, which has gained 26%.
Qualcomm grew rapidly over the past decade as its modems and processors became essential parts for high-end smartphones, especially those running Google Android. Qualcomm also sells modems and related parts to Apple for its iPhones.
But the company has warned investors that Apple could choose to stop buying Qualcomm parts as soon as 2027. Qualcomm said on Tuesday that its growing businesses will more than offset any losses from Apple.
A Li Auto L9 electric vehicle (EV) is seen displayed at the Qualcomm booth during the first China International Supply Chain Expo (CISCE) in Beijing, China November 28, 2023.
Florence Lo | Reuters
Qualcomm’s strategy under Amon has been to use the technology its developed for its handset chips, like modems, processors, and AI accelerators, in new markets, including cars, PCs, and virtual reality. The investor event was the first time in years that the company has given a forecast for those new markets. Qualcomm said its total addressable market is as large as $900 billion.
“We put a strategy in ’21, and we’re not changing our strategy,” Amon said.
Laptop and desktop chips are currently dominated by Intel, which has over 70% percent of the market, according to Mercury Research. Intel reported $29 billion in PC chip sales in its 2023.
“The competitive landscape changed between the Windows and Macs,” Amon said, referring to Apple’s move in 2020 to switch from Intel to its own processors. “We saw that as an opportunity, especially as the ecosystem did not have confidence in the existing players to actually deliver a solution.”
The forecast for XR headsets also hints at the growth potential of the VR market over the next five years. Qualcomm supplies chips to many of the top headset makers, including Meta for its Quest and Ray-Bans products.
When it comes to artificial intelligence, Qualcomm calls itself an “edge AI” company, in contrast to cloud-based AI that’s typically powered by Nvidia processors. Company officials didn’t rule out introducing data center products in an interview with CNBC.
Qualcomm suggested that its mobile chips will be able to run the kind of advanced AI that’s restricted to large server farms today, an indication that that company may benefit from the AI boom down the road as the technology becomes more efficient.
“What you can run on the cloud last year, you can run on the device this year,” Durga Malladi, Qualcomm’s senior vice president in charge of planning, said at the event.
Technology
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Technology
Intuit, H&R Block shares fall after report that Trump government efficiency team is considering tax-filing app
Michael Nagle | Bloomberg | Getty Images
The stock prices for H&R Block and Intuit fell after a report Tuesday said Trump’s government efficiency team is considering creating a free tax-filing app.
Intuit, which makes the TurboTax tax-filing software, was down 5%, putting it on pace for its worst day since Aug. 23, when the company’s stock price fell nearly 7%. H&R Block was down 8% and on pace for its worst day since 2020.
President-elect Donald Trump’s “Department of Government Efficiency” has held “highly preliminary” discussions about creating the free tax-filing app, The Washington Post reported. The so-called DOGE will not be an official government department but an outside advisory commission. It will be led by billionaire Elon Musk and former Republican presidential candidate Vivek Ramaswamy and aims to slash government spending.
A DOGE tax-filing app would be a competitor of both H&R Block and TurboTax.
Intuit spokeswoman Tania Mercado didn’t directly address the prospect of a government tax-filing app, but told CNBC in a statement that, “For decades, Intuit has publicly called for simplifying the U.S. tax code so individuals, families, and small businesses can better understand their finances.”
George Agurkis, H&R Block’s director of government relations, said in an email that the company looks forward “to engaging with the new Administration and the Department of Government Efficiency on their ideas related to sound and efficient tax administration.”
It’s unclear where a new DOGE tax app would bridge with newer policies the Biden administration already implemented. Under the Biden administration, the IRS in March rolled out a pilot Direct File program in 12 states, allowing qualified taxpayers to file directly through a government portal. The IRS also offers free filing services through its Free File program for taxpayers who make an adjusted gross income of $79,000 or less.
While both Intuit and H&R Block have free filing options, neither have had stellar records when it comes to transparently offering those services.
The Federal Trade Commission in February filed an administrative complaint against H&R Block for deceptively marketing free filing products and wrongfully deleting users’ in-progress tax data. Intuit, meanwhile, agreed to pay $141 million in restitution “for deceiving millions of low-income Americans into paying for tax services that should have been free,” according to the office of New York Attorney General Letitia James.
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