The message from investors to the software, wealth management, legal services and logistics industries this month has been clear: AI is coming for your business.<\/p>\n
The release of new, ever more powerful AI tools<\/a> has coincided with a stock market slide, which has swept up sectors as diverse as drug distribution, commercial property and price comparison sites. Advances in the technology are giving increasing credulity to predictions that it could render millions of white-collar jobs obsolete \u2013 or, at least, eat into the profits of established companies.<\/p>\n Carl Benedikt Frey, the author of How Progress Ends and an associate professor of AI and work at the University of Oxford, says investors are reassessing the value of companies that rely heavily on selling software or specialist knowledge.<\/p>\n \u201cAI turns once-scarce expertise into output that\u2019s cheaper, faster, and increasingly comparable, which compresses margins long before whole jobs disappear.\u201d<\/p>\n Fears over widespread job losses were amplified this week by a viral essay<\/a>, penned by AI entrepreneur Matt Shumer, titled: Something big is happening. In it, Shumer purports to explain to the world outside Silicon Valley that new models will come for coding jobs and then \u201ceverything else\u201d, comparing the present moment with the February just before the Covid pandemic.<\/p>\n The post was viewed 80m times on X, triggering fear and fury \u2013 including from people pointing out that Shumer has a history of AI hype. (He previously excited the internet by announcing<\/a> the release of the world\u2019s \u201ctop open-source model\u201d, which it was not<\/a>.)<\/p>\n Shumer and the markets were reacting to the capabilities of recently released models such as Anthropic\u2019s Claude Opus 4.6 and OpenAI\u2019s GPT-5.3-Codex, both improvements on previous, powerful AI products.<\/p>\n But there are other reasons for the febrility of the moment, not least the companies that are building these models. AI \u201chyperscalers\u201d \u2013 the term for the big US tech players in the field \u2013 collectively plan to spend $660bn (\u00a3484bn) this year. This follows a year of colossal, often circular deals between the world\u2019s biggest tech companies.<\/p>\n However, cracks have appeared in these numbers, as well as questions about what they actually mean. Nvidia and OpenAI recently appeared to drop a $100bn deal, replacing it with an as yet unknown, smaller commitment.<\/p>\n Meanwhile, none of the AI model-builders \u2013 not OpenAI, xAI or Anthropic \u2013 have a clear path to the enormous revenue that would justify this spend; the revenue from the entire global software sector this year is projected to be just $780bn.<\/p>\n It has appeared this week that both arguments about AI \u2013 that it is an unsustainable boom or heralds a destructive revolution in white-collar work \u2013 have been entertained by some investors, after shares in Google\u2019s parent company, Alphabet, and Mark Zuckerberg\u2019s Meta were affected by apparent concerns about a spending bubble.<\/p>\n Bluntly, investors expect these companies to recoup their investment via hordes of individuals and businesses paying for their tools, because they allow certain tasks and jobs to be carried out by fewer people or over fewer hours. Or in economic jargon, a productivity boom.<\/p>\n \u201cThe two themes are inherently linked but not necessarily contradictory,\u201d says Jason Borbora-Sheen, a portfolio manager at investment management firm Ninety One.<\/p>\n At first, investors backed expenditure by the \u201chyperscalers\u201d in the initial phase of the AI gold rush. Those concerns have now flipped to cash burn and the sheer scale of investment needed to stay competitive, says Borbora-Sheen, while at the same time the share prices of wealth managers and others have been affected by the perception that AI is \u201cnow here, will evolve and can displace\u201d.<\/p>\n Companies have cited AI as an influence on job-cutting plans, including British American Tobacco this week, but there has not been a wave of wholesale disruption yet. Greg Thwaites, a research director at the UK thinktank the Resolution Foundation and an associate professor at the University of Nottingham, says evidence of a tangible AI jobs impact on large western economies is \u201cquite ambiguous so far\u201d.<\/p>\n Not all white-collar work will be affected, he says, although AI might test axioms around the age-old capitalist concept of \u201ccreative destruction\u201d, which involves entirely new jobs replacing outdated ones, such as car mechanics replacing farriers. Will AI be a different case because the change has come so fast or because it will be good at absolutely everything?<\/p>\n He adds: \u201cThere are some jobs that are going to look very different quite quickly. But the idea that there are going to be bands of unemployed lawyers and accountants roaming around London within a few years seems like a stretch to me.\u201d<\/p>\n Alvin Nguyen, an analyst at Forrester, says the fears that shook the stock market are based on sentiment and not evidence: no one has had time to evaluate the performance of an Opus 4.6-powered wealth manager.<\/p>\n \u201cIt\u2019s a kneejerk reaction,\u201d he said. \u201cHow true is it? Look, there\u2019s plenty of leaders out there who thought, I can replace people with AI at the beginning. And a lot of people acted on that. And I think one of the things that\u2019s being found out is that for a lot of cases, no, it hasn\u2019t panned out.\u201d<\/p>\n Aaron Rosenberg, a partner at venture capital firm Radical Ventures, \u2013 whose investments include leading AI firm Cohere \u2013 and former head of strategy and operations at Google\u2019s AI unit DeepMind, says the impact of AI is being underestimated in the long term but adoption of groundbreaking models will not be uniform.<\/p>\n \u201cHistory shows a repeated pattern of there being a significant lag between a technology working in a lab and it permeating the wider economy, as well as a chasm between early adopters and the majority of users,\u201d he says.<\/p>\n