Welcome, BBC listeners, to a brave new world.
If this continues, we will have systems that can replace humans at business science politics disinformation warfare, everything.
Yes, if the AI boom is taking our jobs, could the AI bust be worse?
This is World Business Report from the BBC World Service.
I'm Ed Butler and today we'll be examining the latest frenetic moves in the AI market.
To many, it feels like a revolution, a boom.
But where is it taking us really?
Also in the show the Saudi crown prince getting a royal welcome at the White House and why a French oil major is being charged with alleged war crimes in Mozambique.
Now, you don't need...
To follow the news headlines to know that artificial intelligence, the revolution is firmly underway.
Tech giants are investing hundreds of billions of dollars almost every month, it seems in research and new data centres.
AI stocks have been booming this year, but it has led to growing concern both about the potential impact on jobs and society, and also on the risk of of an economic bubble, potentially one about to burst.
Google is one of the tech giants investing heavily in AI.
On Tuesday, it launched the latest version of its artificial intelligence model Gemini, feeding into its search engine and other products.
In an exclusive BBC interview, CEO Sundar Pichai described how he saw the risks of a potential AI bubble.
Given the potential of this technology, the excitement is very rational.
It's also true when we go through these investment cycles, there are moments we overshoot.
We can look back at the internet right now.
There was clearly a lot of excess investment, but none of us would question whether the internet was profound or did it drive a lot of impact.
It's fundamentally changed how we work digitally as a society.
I expect AI to be the same.
So I think it's both rational and there are elements of irrationality through a moment like this.
No company is going to be immune, including us.
If you overinvest, you know, we'll have to work through that phase.
Well, Sundar Pichai also told our economics editor, Faisal Islam, about the perceived threat of AI taking away jobs and destroying the labour market.
I would encourage the next generation to embrace the technology.
Learn to use it in the context of what you do.
And I think people will learn to adopt and adapt to AI will do better.
It doesn't matter whether you want to be a teacher or a doctor.
All those professions will be around, but the people who will do well in each of those professions are people who learn how to use these tools.
Alphabet CEO Sundar Pichai, and you can hear a longer version of that interview in today's edition of Business Daily.
Well, his comments have only added to the debate about the potential of AI.
Is it really AI? this new fourth industrial revolution, as some are calling it?
Or is there too much hype going on?
Many firms still complain of struggling to find profitable applications for the new tech.
OpenAI, the firm behind ChapGPT, has yet to report a profit itself, despite the hundreds of billions that are invested in it.
And some say we don't understand the scale of what we're getting into.
Conor Leahy is CEO of Conjecture.
It's an AI safety research company in London.
He's also a campaigner for tighter regulation of AI.
And he's got no doubt of its imminent revolutionary impact on our lives and our economy.
If the technology just keeps getting better, as it has for the last years, and it just keeps going, we will soon have AI that is as smart or smarter than humans.
I already basically have no reason to hire junior coding engineers, because AI is just better at everything and dirt cheap.
So if this continues, you will have systems that can replace humans at everything.
They can outperform humans at doing business.
Science politics disinformation warfare, everything.
And if there are such systems in existence, it's extremely hard to imagine a world that looks normal.
And the timeframe for that transformation is years, decades?
How do you see it?
Years.
I think there is basically no one in the space nowadays that thinks it's more than a decade away.
It used to be that people thought it was, you know, 20 or 40 or 50 or 100 years away.
This is now a very much a minority position, even among the more sceptical.
So, like Inside of the AI world where I work, you know you're considered aggressive if you say one or two years and you're considered extremely conservative if you say 10 years.
And therefore, the economic potential of this technology is practically limitless.
The people who've invested, whatever it is 15 trillion this year alone in new data centers are not overspending.
They are just gearing up for the inevitable swamp of new technology, which is going to change everything.
I don't like the word inevitable, because I think it is very much evitable if we decided that this is not what we want.
If we do not want humans to be, you know replaced, overpowered and potentially driven to extinction, then we should simply not to do this.
But yes, if one were to believe that these technologies AGI, artificial general intelligence, human intelligence and beyond is achievable in the next couple of years, well then, you know, a couple trillion dollars is a bargain.
Well, that is the view of one deeply concerned activist.
Tamsin Deasy Weinstein offers another perspective about the future labour market.
She's a future of work strategist and a director at the University College of the Cayman Islands.
Some companies are kind of jumping all in and they are replacing their whole workforces with AI and automation.
So it tends to be things like answering the telephone, customer service, that very frontline entry level tasks.
They're the things that are being replaced en masse.
It isn't going up the value chain as much yet, purely because AI tools aren't that sophisticated yet.
So there's obviously the conversation that's been going on for a long time about AGI artificial general intelligence which is AI tools being as clever as humans.
We're nowhere near there.
Because if you look at what an AI tool can do now, it does a task.
It doesn't do a whole job.
So there's no AI tool that can be a marketing director or a producer.
It can do specific tasks within a role.
And until we get to that point where agents or agentic AI or AGI can get to the point where it can do a full job we're never going to replace whole jobs.
What we are doing is replacing tasks.
Entry-level jobs. are being affected.
So graduates who complain that the workplace seems like a particularly forbidding and closed shop to them, they have a point.
That's where the layer of jobs is being taken out first, because interns graduates, people that are taking the junior jobs, are doing the lower level tasks and they're not doing as broad a job role.
That's something that's easily automated and it's wiping out that first level of jobs.
Now what will happen over time, if you look at studies from every industrial revolution, is that jobs augment and get replaced.
What will eventually happen is new jobs will appear and we are starting to see some of that now.
Tamsin Deasy-Weinstein.
So what is the big picture here?
Let's hear from someone who studied the new boom from an academic viewpoint.
He's Professor Daron Asimoglu of MIT in Boston.
He has a recent Nobel Prize for Economics to his name.
And he's made predictions for the future course of the so-called fourth industrial revolution.
He has his doubts about it.
I think it would be quite accurate to say that advances in generative AI are either in the form of speech text videos, music.
Those advances over the last six or seven years have been truly phenomenal.
I think going from those models to actual applications that change people's lives in the production process That's been a little harder.
Yeah.
I mean I saw one report suggesting that 90 of small and medium firms introducing AI into their processes were discovering kind of little or no economic gain as yet.
Yeah.
I don't find that surprising, because there is absolutely no occupation that can be wholesale automated using AI.
You make a distinction and this is interesting when we talk about the labour market and between machine usefulness and automation, between AI that helps humans and AI that replaces human labor.
How do you see that one working?
So my relatively modest forecasts are based on a path of AI development based on automation and automation direction.
That is, to replace humans effectively, to become people more intelligent, more capable than humans in most workplace functions.
100%.
So AGI or artificial general intelligence, refers to models that become as good as human experts across pretty much all domains or all cognitive domains.
And the more that objective is achieved, the more tasks can be done by the machines instead of humans.
So they will replace humans.
Some of those humans may be forced to do other things, or they may remain unemployed.
That generally doesn't improve productivity all that much, because all you're doing is you're doing the same tasks one way instead of another way.
Okay, perhaps a little bit more cheaply.
The way to really get a productivity revolution is to make your workers more productive.
And AI offers many ways of doing that, because it can provide much more relevant, much more powerful information for problem solving and making workers more capable of doing new things.
That's what I call machine usefulness, or sometimes referred to as pro-worker AI.
And one important point is that if we went the pro-worker AI direction, the inequality and disruption effects would be less as well.
So you think in some ways it's more of a doomsday scenario for some people, isn't it, that AI will simply make us redundant, that those forecasts are over-optimistic.
It won't happen.
The technology will not improve so fast, but what needs to happen is
We need to figure out how to integrate it with the workers that we have doing the jobs that they do, so they do them better.
100%.
100%.
The way I would put it is that, while the doomsday scenario of, in the next three or four or five years, mass unemployment being created because AI starts doing everything is a bit far-fetched,
It's not going to develop that fast in my opinion.
Right.
So I mean it's understandable perhaps that at the early stages, the first two or three years, that AI has become a thing for companies.
They're struggling to figure out deployment of this technology.
The next decade perhaps is the key one though, isn't it?
You've estimated what?
1.1 to 1.6% increase potentially in GDP due to AI.
What I was intending to do was to show How you would use basic economic reasoning and the available data to end up with much more grounded numbers than predicting doubling of GDP or 30 gains in GDP, which are truly just phenomenal.
Nothing, nothing that we know over the last hundreds of years has delivered anything like that.
Do you think it justifies the level of investment we're seeing now?
I mean there are these huge fears, widespread fears of a bubble about to burst because of the trillions being pumped in by those handful of major tech firms into new data centers and so on.
Do you think that that is justified by the potential dividends on offer?
No, I don't think so.
So if you're investing 1 trillion – in something that's not gonna last decades, then you should really see returns of the order of hundreds of billions of dollars just from your investments this year for the next 10 years.
That just is beyond what anybody is forecast in the near future.
So I think we are locked into a major race, and whoever surges ahead, either as a country or as a company, is going to be able to remain in the lead.
So there is a sort of a racing element to it.
And there is some amount of hype, especially on the part of investors, in an environment in which lots of other assets are underperforming.
If there is a bubble, people could panic.
And so it's not clear which companies are going to be brought down if the bubble bursts.
Professor of Economics, Nobel Laureate, Daron Asamoglu.
Well, I'm now with Kuei Nguyen.
She's Chief Investment Officer of Equity Strategies for Research Affiliates based in New York.
A view from the markets, Kuei.
Microsoft and Nvidia say they're going to invest a total of 15 billion in an AI startup Anthropic.
In the last few hours,
Is that a big deal?
Well, I mean, I think that it is a big deal.
It's a big deal because every great technological leap forward is requires huge sums of investment.
And sometimes that forms into a bubble.
Now, whether or not this is the beginning of a bubble, the end of the bubble, the middle of the bubble, we don't know.
But in order for us to really realize the full potential of AI, I think what we're seeing is that these kinds of investments are required.
Yeah, but meanwhile, the markets, I mean, in the last day or two have started to wobble a bit.
We've got the NVIDIA results that we are announcing tomorrow.
There seems to be a little bit of anxiety creeping across Wall Street.
And I think the anxiety is really based on healthy scepticism.
I think that if you really got what we saw in say, 1998 and 1999, where everybody drank the Kool-Aid of the internet is going to make everything much more profitable right away, then I would say that we're probably towards the end of the book.
Right.
And briefly a federal judge in the United States has ruled that the tech giant Meta does not hold a monopoly in social media and its acquisition of the photo sharing app Instagram and WhatsApp.
These did not violate antitrust laws.
It's the end of a long story, isn't it?
It's the end of a very long story, but it just tells you how quickly technology evolves.
Yeah.
Has the share price been buoyant as a result?
Yes.
I mean, meta recovered some of its losses on the day, which is normal.
So, you know, I mean, it doesn't necessarily mean that the competition is over for meta.
It just is a recognition that meta is still in a very competitive market.
Kwe and Wen, thank you very much indeed for your thoughts.
You're with World Business Report from the BBC World Service.
Now then, the White House has just been rolling out the red carpet for Saudi Arabia's Crown Prince, Mohammed bin Salman.
Some of the fanfare there as President Trump heaped praise on the Saudi crown prince, who arrived in Washington for talks, his first visit since the murder of the journalist Jamal Khashoggi by Saudi agents back in 2018.
The prince, who has denied any involvement in that, has announced he's now going to be boosting Saudi investments in the US to the tune of 1 trillion.
Here's what Mohammed bin Salman had to say about this investment.
Today and tomorrow we're going to announce that we are going to increase that 600 billion to almost 1 trillion of investment real investment and real opportunity by details in many areas.
And the agreement that we are signing today.
In many areas in technology, in AI, in air materials magnets, et cetera that will create a lot of investment opportunities.
So you are doing that now.
You're saying to me now.
That the 600 billion will be 1 trillion.
Definitely, because what we are signing will facilitate that.
I like that very much.
A very happy President Trump and Crown Prince Mohammed bin Salman.
Well, Dr. Sanam Vakil is the director of the Middle East and North Africa program at Chatham House.
I asked her for her reaction to the Crown Prince's announcement.
It is indeed a very big number.
The original pledge was 600 billion when Crown Prince Mohammed bin Salman and President Trump met in Riyadh in May.
And the increase, of course, is to wow the US president and to future-proof the US-Saudi relationship, anchor it in technology AI, infrastructure and defense investments in order to boost also Saudi Arabia's big plans tied to Vision 2030.
Yeah, remind us of Vision 2030 and Saudi Arabia's plans.
How do they fit in with, you know, an intimate relations with the United States?
Well, certainly AI and a lot of this investment is a new corridor of Vision 2030.
But the vision is very much tied to the Crown Prince's future ambitions.
He has been leading an effort to diversify the Saudi economy, to prepare it for peak or post oil and to build a knowledge-based diversified economy.
So trying to build up private sector diversified industries from tourism to the tech and defense sectors.
There's a sports investment that has also been very important.
And Crown Prince is seeking a lot of investment into the kingdom to upskill the economy.
And that's very much tied to a stronger economic and security partnership with the United States.
And that's what you see as being perhaps the central dividend for Saudi Arabia this week.
I mean, obviously there is a diplomatic thawing.
There has been controversy over the Khashoggi killing and the fact that previous presidents were of course ostracising the Saudis to some degree.
That that is now at an end, it would appear, with the current administration.
And therefore perhaps it's a green light for companies to step in, investors to step in from the US without perhaps quite the fear of the political baggage that would come with that.
Well, to be very honest, the political thaw began under the Biden administration.
President Biden came into office declaring Saudi Arabia and Crown Prince Mohammed bin Salman as a pariah for his role, perhaps in green lighting the detention murder of Jamal Khashoggi, as well as a lot of other human rights related issues, including the detention of Saudis in the Ritz-Carlton, and foreign policy issues as well.
So it was a long laundry list of tension points.
But very quickly there was a thaw that emerged around 2022 2023, when the Biden administration also saw Saudi Arabia as holding important leverage to facilitate normalization between Israel and Saudi Arabia.
Nevertheless, what has happened with President Trump is the advancement of much more transactional and business-oriented oriented approach.
That certainly showcases that MBS has overcome this public relations crisis, if you will, and showcases that the kingdom has matured and is a place of investment for the United States and vice versa, but also aims to show that the kingdom is going to play a larger role across the Middle East for regional security issues.
That's Dr. Sanam Vakil of the Chatham House think tank in London.
Now the French energy company Total Energy is facing criminal charges over a massacre that took place in Mozambique in 2021, near its multi-billion dollar international gas project there.
In a complaint filed with French prosecutors, a human rights group accused Total Energy of complicity in war crimes, including the torture and execution of dozens of civilians held by local security forces at the facility.
Total has always denied responsibility for the actions of government troops who were involved in guarding the Afungi Peninsula gas refinery development.
Daniel Ribeiro is a Mozambican biologist.
He's an activist who works with communities around these oil installations in the north of the country.
The communities on the ground have been going through numerous cases of human rights violations, both from the insurgents in the area, but also from the security forces in the area.
And these occurrences that are being highlighted now in court are not the only ones.
These are just the ones that we've managed to get enough evidence to justify going to court.
You were part of the process to gather and present this evidence?
It's quite dangerous in Mozambique to work on these issues.
It's very hard for Mozambican group to investigate and take these issues out and not have severe consequences.
So we were very lucky that we had journalists and individuals willing to listen to these stories and take it forward and do the investigation even deeper, to the level where we have enough evidence to be able to take this to a court in France.
Right.
This relates to this massacre in 2021, where it's thought perhaps hundreds of people died and they were killed in an alleged massacre by the military, but
The reason that Total Energies is being accused is because they were effectively bankrolling the military to be there to offer security to their LNG plant.
Is that right?
So yeah, if you're on the ground, one thing you'll notice the focus of the security forces on the ground the military, the police is to protect the Total Project.
When the Palma attack, which was a big attack that caused the force majeure, there were over 800 security forces protecting the project and hardly any security forces protecting civilians.
That's why the casualties were so high.
So it's very clearly the priority of the military, of the security forces, is to protect the project and not the civilians.
So obviously Total were providing the money to put the installation there, but that doesn't necessarily make them complicit.
You think that they effectively were?
If you know that the military is committing crimes and you carry on depending on their security, working with them and using the services and depending on the services for security and not dealing with these issues, not being proactive in dealing with crimes, that also is a problem.
The other issue is they have in the past.
And even our own internal independent report by Total, the Rufin report, which has highlighted the risks of the financial links to the army and the possibility of Total being seen as complicit if they had financial links.
If they're clean, if they're innocent, then they shouldn't be worried.
No.
Well, total energies, indeed, they deny involvement.
I'd like to talk more broadly though, about what's been going on in this northern part of Mozambique, because so much was pinned, wasn't it, on the development of this LNG facility, on the expansion of oil and gas in the region, which would provide an economic footprint for a part of the country which is terribly neglected and has been for for decades and decades.
Is there any sense that the promise of this oil and gas facility has delivered anything of benefit to the local community?
No.
The reality is communities have lost access to the ocean and that's fishing communities.
And there's been huge delays in them receiving lands to restart their farming and their livelihoods, which means that whatever financial compensation was given to allow them to move and adapt to the new area had to be used to survive.
The fact that you have the project there makes it a focus for the conflict.
The presence of the project puts the surrounding communities at danger.
But also, we have to look at the fundamentals of the investment.
These contracts are predatory.
Mozambique gains very little.
So in a way, it's actually a perfect storm.
Environmentally damaging, socially damaging, economically not getting much from it.
Just to move on, this was a massacre that took place in 2021.
Obviously, the Islamist insurgency is one that continued.
What is the state there right now for the population?
Is there any sense of recovery, redemption from this very difficult period?
The insurgency is still active and it's very hard to deal with this type of insurgence this with military action.
You need to deal with the social drivers and economic drivers of these issues and that's not being dealt with.
They're not expecting the situation to improve anytime soon, but at least we need to acknowledge what they are suffering on the ground.
Daniel Ribeiro in Mozambique, and that's it for today's World Business Report.
Thanks for listening.
