如何看待「AI取代」？

Joshua Gans' Newsletter

What are we to make of "AI replacement"?

Perhaps the biggest, triggering fears from AI are ignited when there is a news story whereby some company is basically getting rid of either employees or service providers because they can “now do it themselves with AI.” This tends to bring people out and say, “see, this is why you should wake up sheeple!”

And of course, at the heart of it is some CEO who is believed to have long had their eye on getting rid of those very things. There is historical precedent. My favourite go-to case is that of Almon Stowger, a funeral director in a small town in Kansas City in the 1890s. He did not like the person who operated the town’s telephone switchboard. He had some reason. That person was the wife of the competing funeral director, and let’s surmise there may not have been the most neutral process for routing incoming bereavement calls. Most of us might have raised some internal stink with the phone company, and others may have wondered why a town that could support two funeral homes only had one switchboard operator. But not Stowager.

Instead, he invented the automated switch with the explicit purpose of wiping out that job. The Stowger switch became the world's leading automated switch, and a mere 90 years after it was invented, the last human operator was replaced. So the scorecard is Stowager 1, Humans 0.

Anyhow, my point is that, yes, there are people in power looking to get rid of some people’s jobs.

Which leads to me to this article in the Wall Street Journal today caught my eye.

The unit, among the world’s largest investment firms with more than $7 trillion in client assets, has to vote shares in thousands of companies. This coming proxy season, it will start using an internal artificial-intelligence-powered platform it is calling Proxy IQ to assist on U.S. company votes, according to a memo seen by The Wall Street Journal.

The bank will use the platform to manage the votes and the AI also will analyze data from more than 3,000 annual company meetings and provide recommendations to the portfolio managers, the memo said, replacing the typical roles of proxy advisers.

And there is definitely a Stowger-esque motive to all of this:

JPMorgan Chief Executive Jamie Dimon has been one of the most outspoken critics, telling an industry gathering last spring that proxy advisers are “incompetent” and “should be gone and dead, done with.”

Obviously, the firms that provided these services for investment banks and others are not too pleased about this development. But the question should be: what about the people who were doing that work?

The clue to this is here:

JPMorgan thinks it is the first large investment firm to entirely stop using external proxy advisers, which provide much of the industry’s plumbing, the memo said. It previously had said it would stop using advisers for vote recommendations, relying on its in-house stewardship team instead. (emphasis added)

You see, there are very few outsourced functions of firms that are significantly sized businesses (and maybe all businesses) that do not have an internal team that is the “node” in working with their output, particularly in service industries. Thus, there is a set of tasks that is being done to produce an actual proxy vote, many of which exist outside JP Morgan, but some of which exist inside. So has AI replaced this job? It is unlikely. Instead, AI has automated many tasks that happen to have been provided by the outsourced firm. As those firms will likely be telling everyone today, that is not all they do, “so please keep using us.”

But what AI has done is created what is likely a third option: hire the people from the outsourced firm into the client firms to do those non-AI related class and cut out having to deal with another entity. That way, those tasks can be more aligned with JP Morgan’s interests, which is one of the issues Dimon and, of course, Stowger had.

My point is twofold. Yes, AI affords opportunities to get rid of “troublesome” employees or suppliers. But, no, that does not imply that those actually doing the work will be out of a job. It may well just move.

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