AI could add USD 16 trillion to global economy: Morgan Stanley

Business News: Artificial intelligence (AI) is set to change the way businesses operate and could have a big impact on jobs worldwide. A recent report by Morgan Stanley Research says AI may affect up to 90% of occupations and could add trillions of dollars to the economy. The report estimates that fully using AI in S&P 500 companies could generate about $920 billion each year, with $490 billion coming from smart software that can make decisions and $430 billion from robots and other AI machines.

AI and Job Transformation

The report highlighted that AI could boost productivity, potentially increasing the S&P 500’s market value by USD 13 trillion to USD 16 trillion over time. “As companies invest billions in AI, investors are asking the trillion-dollar question: Will this technology increase productivity and profits, or just replace human jobs?” the report said. Morgan Stanley also painted a more positive picture. AI could not only replace some jobs but also improve labor markets and create new roles. Past technological revolutions, such as electrification and the internet, have changed the way people work, and AI is expected to do the same.

New Jobs and Skills

Heather Berger, U.S. Economist at Morgan Stanley, said, “While some jobs may be automated, others will be enhanced through AI, and new types of jobs are likely to emerge. Companies are already responding by creating positions like Chief AI Officer to manage AI adoption. Growth is also expected in areas such as data governance, compliance, and information security. Morgan Stanley identified three sectors with the most AI potential: consumer staples distribution and retail, real estate management and development, and transportation.

AI Across Industries

AI could change how industries work from optimizing supply chains and personalizing retail pricing to providing humanoid assistance in real estate and autonomous delivery in logistics. With AI improving at a rate that doubles its capabilities roughly every seven months, the report concluded that investors should closely watch AI adoption, as its impact on value creation is still underestimated.