Daron Acemoglu on AI's Limited Economic Impact Over the Next Decade

Daron Acemoglu, Institute Professor at MIT, suggests that only around 25% of tasks suitable for artificial intelligence (AI) are expected to be cost-effective in the next decade. Despite potential breakthroughs, the impact of AI is not expected to be immediate. According to Goldman Sachs, this means that AI will likely affect less than 5% of all tasks, contributing only a 0. 5% increase in US productivity and a cumulative 0. 9% growth in GDP over the next decade. Acemoglu stated that while large language models have proven impressive, it remains uncertain whether these models alone can match the intelligence of Hal from "2001: A Space Odyssey".
He expressed concerns about the limitations of the current architecture and suggested that increasing GPU capacity may not accelerate AI progress as much as improving the quality of data. Acemoglu also questioned the source of the necessary data. Jim Covello, Head of Global Equity Research at Goldman Sachs, stated that AI needs to solve complex problems in order for companies like Nvidia, Microsoft, Alphabet, Meta, Amazon, and Super Microcomputer to achieve a return on the $1 trillion expected to be spent on AI capital expenditures in the coming years. Covello emphasized that there is currently no cost-effective use for AI and highlighted a significant misunderstanding about the technology's capabilities, stating that it lacks cognitive reasoning abilities.
Brief news summary
Daron Acemoglu, an MIT Institute Professor, believes that only 25% of AI tasks will be cost-effective within the next decade. While AI has made significant advancements, Acemoglu suggests that its impact will take time to materialize. Goldman Sachs projects that AI will impact less than 5% of tasks, leading to a 0.5% increase in U.S. productivity and 0.9% GDP growth in the next 10 years. Acemoglu expresses doubt about the current architecture of large language models (LLMs) and questions the efficacy of increasing GPU capacity without considering the need for higher quality data. To justify their projected $1 trillion AI capex investment, companies like Nvidia, Microsoft, Alphabet, Meta, Amazon, and Super Microcomputer need the technology to solve complex problems. Jim Covello, Goldman Sachs' Head of Global Equity Research, emphasizes that current uses of AI are not cost-effective and there is a misconception about its capabilities.
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