James Pethokoukis, AEI economic policy analyst, joins 'Power Lunch' to discuss the analyst's take on the impact of AI-induced job losses, who to 'blame' for Bernie Sanders' latest AI jobs report and much more.

The release of Open AI's ChatGPT has accelerated the development of artificial intelligence and warnings about its impact on society.

Rise of AI

James Pethokoukis, an analyst at the American Enterprise Institute, responded to a report warning that AI could eliminate nearly 100 million US jobs. He argued that such figures are likely exaggerated, as most credible analyses suggest AI will automate certain tasks within jobs rather than replace entire roles. Pethokoukis noted that the methodology behind the high job loss estimate is flawed, often confusing task automation with full job automation.

He also highlighted the risk of overreaction from policymakers, warning that sensational reports could prompt excessive regulation that may slow or halt AI-driven economic growth. Pethokoukis pointed out that some in Congress are pushing for measures such as robot taxes and changes to the tax code, which could impact investment in AI infrastructure and the broader economy.

AI won't replace workers but the tasks workers do: James Pethokoukis

Let's bring in Jimmy Pethokoukis of AEI and a CNBC contributor. All right, so Jimmy, this report is titled Tech Oligarchs War Against Workers. Warns AI could eliminate nearly 100 million US jobs. It's coming from Bernie Sanders. Clearly, it's political, but it's getting a lot of attention across many media organizations. What's your take? Yeah, it is getting a lot of attention. When you start using big numbers like 100 million jobs lost, that's not surprising. But since Senator Sanders has so much confidence in CHAT-GPT to create this analysis, I decided to ask CHAT-GPT if the report's methodology was sound. And it said that the report's methodology was not sound. Maybe one of the biggest errors is reports seem to confuse the ability of AI to automate particular parts of a job with automating the entire job. And that's not a surprising finding. When most other people who have done this kind of analysis for real, whether they're consultants like McKinsey or Wall Street banks, what they've determined is not that AI is going to replace 70% of jobs, but more like maybe 25% of job tasks. So it's a very different thing. It's a lot less scary. But unfortunately, that doesn't make for kind of a Halloween headline. So the machine screwed up. So I'm now wondering if we should put out a new report saying that CHAT-GPT, at least in this instance, should be replaced with a human. Well, interesting. Though when you did give CHAT-GPT, like ask it to do, give it a proper prompt, it actually came up with, I think, a fairly good analysis of the Sanders report. I think the problem there was the humans and what the humans asked the machine to do. Listen, when a report like this comes out with a number that is such an outlier, you know the problem probably lies with the human. And that's the case. I would blame the staff of that Senate committee rather than the machine. Because again, it's such an outlier report that you have to assume that it's talking about some sort of super powerful AI that can pretty much replace all the jobs. And if it can do that, well, then we're probably growing 20% a year in GDP. And we act like AI is this one thing when it's probably just a series of a bunch of different things that we use to solve a bunch of different problems. And so why are we leading a business news hour with this story, Jimmy? I'll tell you why. Because Bernie Sanders is a powerful guy, okay? Parts of this report are probably very valid. There's a lot of people that are really scared about their jobs. And if we start to see regulation coming out of Congress around AI, I don't mean some, I mean a lot, because they hear reports like this, they overreact, they're going to start to do stuff. That puts at risk, I think, much of the AI growth model that we are talking about. Maybe the big risk to AI is not electricity or water, which those things are very valid, but also congressional regulatory risk. I mean, I think that's the case. If you look at that report, all the stuff about job loss and including a bunch of scattered scary quotes from tech CEOs talking about superintelligence, what it comes down to is there's an agenda there. And that agenda, in that report, they want to change the tax code to make it more expensive to invest, to invest. And this whole economy is being kept up by massive AI infrastructure, AI infrastructure investment. It talks about robot taxes. So there's a real agenda that at least some people in Congress would like to institute to at least slow down this revolution, though my concern is that it would not just slow it down, it would stop it with all the economic impacts that you might imagine.

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Tel Aviv-Yafo

Middle East Conflict

Israelis remember victims two years after Hamas attack

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Riyadh

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Stockholm

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Cairo

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Chicago

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Paris

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Santa Clara

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Gorakshep

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Indianapolis

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Portland

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Jerusalem

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Santa Teresa

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Washington

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Tokyo

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AI won't replace workers but the tasks workers do: James Pethokoukis

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Rise of AI