The International Monetary Fund says AI will hit 40% of jobs and worsen inequality

“In most scenarios, AI is likely to exacerbate overall inequality,” says Kristalina Georgieva, Executive Director of the International Monetary Fund.

Ms Georgieva adds that policymakers must address the “worrying trend” in order to “prevent technology from further inflaming social tensions”.

The spread of artificial intelligence has highlighted its benefits and risks.

The International Monetary Fund said that artificial intelligence is likely to affect a larger proportion of jobs – about 60% – in advanced economies. In half of these cases, workers can expect to benefit from AI integration, which will boost their productivity.

In other cases, AI will have the ability to perform key tasks currently performed by humans. This may lead to decreased demand for labor, affecting wages and even eliminating jobs.

Meanwhile, the International Monetary Fund expects technology to affect only 26% of jobs in low-income countries.

He echoes a report from Goldman Sachs in 2023, which estimated that AI could replace the equivalent of 300 million full-time jobs – but said there could also be new jobs alongside a productivity boom.

“Many of these countries do not have the infrastructure or skilled workforce to exploit the benefits of AI, raising the risk that over time the technology will exacerbate inequality between countries,” Ms. Georgieva said.

More generally, higher-income and younger workers may see a disproportionate increase in their wages after adopting AI.

The IMF believes that low-income and older workers may be left behind.

“It is very important for countries to create comprehensive social safety nets and provide retraining programs for vulnerable workers,” Georgieva said. “By doing so, we can make the transition to AI more inclusive, protecting livelihoods and reducing inequality.”

The IMF's analysis comes as global business and political leaders meet at the World Economic Forum in Davos, Switzerland.

Artificial intelligence is a topic of discussion, following the increasing popularity of applications such as ChatGPT.

China has introduced some of the world's first national regulations on artificial intelligence, which include rules on how algorithms are developed and deployed.

In October, President Biden signed an executive order requiring developers to share AI-related safety findings with the US government.