Are CEOs Lying About AI?

Daily Profit Investing Research
by 

American companies are investing billions in Artificial Intelligence.

Microsoft has been a big winner.

Over 50% of the Fortune 500 companies are already using its Azure AI.

Why?

Because it increases productivity.

That means getting more work out of every employee.

It’s already working…

  • Developers are 20% more productive using Microsoft’s Copilot when programming
  • Generative AI increases skilled worker’s performance by 40% according to MIT
  • Up to 46% of office and administrative work can be done by AI according to Goldman Sachs

Here’s the thing…

These AI tools can make every employee more productive.

That means companies can get the same work done – with fewer employees.

It’s already translating into layoffs within the tech sector. Just consider the size of the layoffs – as a percentage of headcount.

Google 6%. PayPal 9%. MetaPlatforms 13%.

Yet it’s also expanding beyond “big tech.”

Accenture 2.5%. Blackrock 3%. And T-Mobile 7%.

The common excuse is that they’re “getting fit.”

During 2020 – 2021 they hired too many people. And now they’re simply reducing their headcounts.

However, this overlooks the most obvious fact…

These companies are implementing AI solutions. And this is massively boosting productivity.

Right now, a CEO really can’t say…

“We just eliminated 1,000 jobs. The reason is because AI is making our employees more productive. So, we simply don’t need as many workers.”

It’s difficult to give that message to employees when sales and profits are at record highs.

Yet that’s exactly what’s happening at UPS and other companies.

UPS plans 12,000 job cuts this year. And that will result in $1 billion in savings (also known as “increased profits”).

The CEO actually admitted that AI was one of the reasons for the layoffs.

Now, I’m not happy to see people losing their jobs.

But the key point is this…

Corporate profits are growing. The S&P 500 is on track for record earnings this year and next.

Big companies are using AI to increase productivity.

That means they can do more work – with less people.

Remember that rising profits are good news for shareholders.

Ian

P.S. I’m having a great week in NYC. Enjoying business and fun in the Big Apple.

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