AI agents will replace work performed by humans ‘on a massive scale’
Another jobs market reality check.
“Effectively, AI agents will replace a huge percentage of work that’s currently performed by humans on a massive scale,” Circle (CRCL) co-founder and CEO Jeremy Allaire told me Tuesday night at the Economic Club of New York in an hourlong conversation.
Goldman Sachs economists in a new note said the US unemployment rate will drift higher to 4.5% by year-end from its current 4.3%, in part because jobs are being replaced by AI.
Citrini Research published a piece on how agentic AI could bring widespread economic destruction by 2028. In the imagined scenario, unemployment will double, and the total value of the stock market is cut by one-third.
“AI capabilities improved, companies needed fewer workers, white collar layoffs increased, displaced workers spent less, margin pressure pushed firms to invest more in AI, AI capabilities improved,” the research paper laid out.
Meanwhile, Jack Dorsey’s Block (XYZ) just canned 40% of its workforce, and Meta (META) is reportedly eyeing 20,000 job cuts as it seeks AI-fueled efficiencies.
Below is the transcript from my in-depth conversation with Allaire. For this article, I isolated his comments on AI because I believe they are profound and come from someone highly respected in the tech industry. The interview has been edited for brevity and clarity.
Circle founder and CEO Jeremy Allaire, right, speaks about his company’s stock price, AI, and stablecoins with Yahoo Finance Executive Editor Brian Sozzi on March 17 at the Economic Club of New York. ·The Economic Club of New York
Sozzi:Are you in the camp that AI will unleash economic prosperity? Because all I’ve heard for the past month is how AI is taking human jobs.
Allaire: I think the first is that agentic AI in particular is going to enable dramatically higher velocity of economic activity, and it will allow for dramatically more efficient forms of corporations … My own belief is that, on an absolute basis in terms of productivity in the economy, GDP growth across every major industry can be transformed and grown in very, very significant ways.
Effectively, AI agents will replace a huge percentage of work that’s currently performed by humans on a massive scale. And I think it’s going to be most dramatic in white-collar work. This is the message that I give to every single employee in my company: If you actually embrace these agentic capabilities, you as a person have new superpowers, and your ability to have impact grows dramatically…
But I think there is going to be this kind of discontinuous relationship between, you know, the way in which the job transformation impacts the labor and the way in which humans pick up these tools and use these tools.
We can all go back to the 1980s. Very few people use personal computers — lots of work was done without personal computers.
I can’t believe it!
And we replaced a lot of work that was being done with paper and pens and files and a lot of other stuff. And we moved it onto personal computers. And then there was a world before there was an internet and the online and radical efficiencies that came from that in all these ways…
And so I think the opportunities for what people can accomplish with this are extraordinary.
What happens to the people, Jeremy, that get left behind, and what role does government have? Is it a role to retrain a massive chunk of the US workforce?
[I] talk to a lot of political leaders about this topic, because they’re now realizing, oh shit, this is going to be probably the defining set of issues of, certainly, the 2028 elections, right? This is going to dominate, because the impact will have swept through the economy in very, very significant ways over the next 24 months. And so they’re trying to think, well, what do we say about this? You know, if we need universal basic income, or we need retraining, like those are the basic concepts. My view is that these are, like I said, oversimplistic.
I don’t have the answer, certainly, but I think a rethinking of the social contract is needed. It’s going to be very hard for politicians on electoral cycles to do that work, and so we need some inspired political and economic thinkers and cultural thinkers to help us consider how we might structure society and the policy and the economy right now, and you can’t find them. Like, tell me who to read, as you can’t find them…
How would you structure it?
First of all, I believe that because these technologies, like AI, are inherently global in scale, these are not going to be problems that are solved nation by nation. We need to think about this more broadly, and I think there’s an opportunity to kind of come up with new forms of social, economic, and political organizations that are native to the internet and that combine humans and AI together to perform the work of the economy and of governance as well.
Is there a massive increase, you think, in the number of unemployed this year?
Quite possibly. I think we’re starting to see the indications of massive changes. What’s interesting about it is that the most technologically advanced firms are actually reducing their headcount faster than anyone else, which is a pretty interesting tell…
But for many organizations, I think they will find that they certainly don’t need to hire people, or they need to hire much more selectively. And there are areas where they don’t need people and they can accomplish the same objectives, and maybe 10 times more with less people as well.
So, I think by 2027 the scrutiny on operating expenses from Wall Street is going to be super-intense, probably by the back half of this year … because you’re going to be able to figure out which organizations are optimizing on using this technology or not.
I do think it will impact the labor market in the near term.
Folks from Syracuse University are on here watching on the livestream. How does this next generation of workers adapt to the environment you’re laying out here?
I think it’s probably the most exciting time to be a college graduate ever. And that’s not the conventional wisdom. I have good evidence of that because my son is sitting here who is a recent college graduate from Tulane University and who got a job in a tech startup. Tech startups are hard, laying off people. He’s like, what is going on? This young man went down the AI rabbit hole and realized it gave him extraordinary superpowers and is now building things he never imagined he could build and participating in industries he didn’t think he could participate in.
Now, I’m biased, as he’s my son, but the point is that if you are young and you are focused and you are technically adept and you want to learn these tools, you can do that, and you will be incredibly useful … And young people are way more open to learning than people that are older — not always, but like you tend to see coming out of a college environment.
So, I believe that if I’m a chemistry grad or I’m a medical grad or whatever field I’m in, you have an opportunity to be a 100xer in your field and in your interest, and so to me, this is the best opportunity ever to enter the labor force if you decide to master these tools.
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
