CAPITAL ACCOUNT
By Greg Ip
Why Dread Hangs Over AI Revolution
Artificial intelligence might be the most transformative technology in generations. It’s also the most joyless.
While Wall Street greets AI with open arms, ordinary Americans respond with ambivalence, anxiety, even dread.
This isn’t like the dot-com era. A survey in 1995 found 72% of respondents comfortable with new technology such as computers and the internet. Just 24% were not.
Fast forward to AI now, and those proportions have flipped: just 31% are comfortable with AI while 68% are uncomfortable, a summer survey for CNBC found.
Why the difference? The dot-com bubble had its own excesses and absurdity. But it also shimmered with optimism and adventure. From Fortune 500 CEOs to college dropouts, everyone had a web-based business idea. Demand for digitally savvy workers was off the charts.
Today, the optimism is largely confined to AI architects and gimlet-eyed executives calculating how much AI can reduce head count while workers wonder whether they’ll be replaced by AI, or someone who knows AI. Meta Platforms, Microsoft andAmazon.com, three of the leading purveyors of AI, have all announced layoffs this year.
Since November 2022, when ChatGPT was released, the market value of the “Magnificent Seven”—megacap tech stocks closely tied to AI such as Nvidia and Microsoft— is up 169%. The spending spurred by that wealth, and the massive sums those companies are plowing into data centers, are why the hard data on economic growth and household finances looks pretty healthy.
And yet consumer sentiment is near a record low, according to the University of Michigan.
There are a lot of reasons for this disconnect, most prominently the cost of living. AI could be one, as well: The very thing powering the stock market to records might be gnawing away at Americans’ sense of well being.
A I can be unsettling even if you face no direct threat from it, just as an out-of-control border bothered people unaffected by illegal immigration. Both undermine your sense of control. “The AI fear is one hunk of meat in a stew of distrust and grievance that has been marinating for a long time,” said Micah Roberts, a partner at pollster Public Opinion Strategies, which conducted the CNBC survey.
Americans have long had mixed feelings about technology. They appreciate the convenience and features while worrying about the costs: to privacy, to mental health, to social cohesion. In that sense, AI is no different from personal computers, the internet or social media.
Most people also get that tech inevitably makes some jobs obsolete. But what about making humans obsolete? In a report, economists at Goldman Sachs say the latter means an acceleration in productivity that “eventually makes human input in knowledge-based work tasks redundant.”
And here is Yale economist Pascual Restrepo imagining the consequences of “artificial general intelligence,” where machines can think and reason just like humans. With enough computing power, even jobs that seem intrinsically human, such as a therapist, could be done better by machines, he concludes. At that point, workers’ share of gross domestic product, currently 52%, “converges to zero, and most income eventually accrues to compute.”
These, keep in mind, are the optimisticscenarios.
John Finger works as a personal banker in Lady Lake, Fla., and at age 27 and with a 4-month-old son, doubts he will ever afford a house without his parents’ help. AI, he worries, forecloses potential careers in banking: “There are back office jobs that pay a lot more money, but if AI is as powerful as they say it is, and I have my doubts, those jobs are going to be gone.”
It isn’t just the job-destroying potential. The technology defies comprehension. Even the modelers aren’t sure why models do what they do. Finger considers himself tech-savvy: “I like my iPhone. I like playing videogames. I love the internet. I love that any question I have I can go on Google.” But AI is different. “Can bad actors train AI to give the answer it wants? Who knows.”
Peter Atwater, an economist who lectures at William & Mary and studies consumer confidence, said the more his students learn about AI, the less comfortable they are. “AI has gone from being a useful, timesaving tool for papers and research to a threat to entry level jobs, higher utility bills, environmental concern about water and farmland turned to data farms,” Atwater said. “I suspect the reasons not to like AI will likely grow.”
Feelings are just that: feelings. Just because AI could replace humans doesn’t mean it will. Few of the companies announcing layoffs cite AI as the reason. Relative to the investments of AI companies, actual corporate adoption has been modest, feeding suspicions of a bubble.
So does it matter that people don’t love AI? It might. Nuclear power once offered the sort of potential that AI promises. But the public never got comfortable with a technology that could also wipe out humanity, especially after the 1979 Three Mile Island accident. From 1978 to 1990, polls showed overwhelming opposition to new reactors, and deployment ground to a halt. Only now is it coming back to life—ironically, to power AI.
Today, AI has political winds at its back. One of President Trump’s first acts was to rescind Joe Biden’s AI safety guidelines. He now gives priority to dismantling regulatory barriers to AI and competing with China.
But those winds can shift. A poll of roughly 2,000 people by Narrative Strategies found just 40% said the AI industry could be “trusted to do the right thing.” Asked about government regulation, 57% said tech and AI needed more.
AI evangelists believe its sheer economic and computational force make it unstoppable. They’d better hope so, because it certainly isn’t going to succeed on its popularity.
