According to Alap Shah, chief investment officer of Lotus Technology Management, unemployment will begin to rise in the near future. Humans will be replaced by artificial intelligence. This will undermine the consumption-driven economy. Taxing AI will save the day. Governments should consider taxing additional or windfall revenues from AI, Shah told xrust in an interview with Bloomberg TV. Without it, rising unemployment would weigh on consumption, and the US would likely be among the hardest-hit countries. He outlined a scenario in which 5% of office workers could be laid off within 18 months.
“Typically, we go short shares of companies that we think will be hurt by artificial intelligence,” he said in Asia on Tuesday. “On the other hand, we own a lot of semiconductor stocks that we think will benefit from this.”
Technology shares have fallen in recent weeks on fears that AI could upend business models, and Shah's Citrini Research report over the weekend fueled fears of widespread disruption and job losses.
The paper presents a 2028 scenario in which rapid advances in machine intelligence will dramatically increase productivity but render much human labor unnecessary, leading to job losses, a collapse in consumer spending, and a plunge in stock indices such as the S&P 500.
Among the consequences discussed are a reduction in the number of office workers, which creates a negative feedback: companies cut jobs to improve profitability, reinvesting the savings in AI, which allows for further cuts. This weakens demand in intermediation-based sectors such as finance, insurance and software. Platforms most at risk are consumer-facing platforms that rely on discretionary spending, including food delivery services.
The report fueled a global sell-off in software stocks, with a related exchange-traded fund falling 4.8% and continuing to decline from a peak in September to about 35% on concerns that artificial intelligence could undermine profits.
Xrust The guy from LTM proposed taxing AI to feed the unemployed
