AI is coming for your jobs; then it’s coming for your retirement. OpenAI, the company behind the popular chatbot ChatGPT, recently released a paper discussing AI’s potential impact on occupations within the US job market.
Researchers found that around 80 percent of the US workforce could have at least 10 percent of their work tasks affected by GPTs, or Generative Pre-trained Transformers – a fancy word for AI. The paper also predicts that around 19 percent of workers could see at least 50 percent of their tasks impacted.
While the paper examines the “impact” on work tasks by AI, it does not distinguish between labor-augmenting and labor-displacing impact. However, looking at the jobs most likely impacted by AI implies a labor-displacing impact on these jobs.
Some of the jobs listed in the paper as most likely to be “impacted” by AI include:
- Tax Preparers.
- Financial Quantitative Analysts.
- Writers and Authors.
- Web and Digital Interface Designers.
- Survey Researchers.
- Writers and Authors.
- Interpreters and Translators.
AI is not stopping at taking over jobs. It’s also eyeing investments and fund management. A sizable proportion of asset management companies are now using AI and statistical models to run trading and investment platforms. The most affected area is asset management, which is expected to suffer the largest number of job cuts in the near future. The problem is that AI is usually only as good as the personnel it is replacing, and if 90% of fund managers underperform the market, AI will perform no better.
The only thing certain about AI is uncertainty.
It is an untested technology in the investment field, and too many variables and risks are involved in assessing its probability of success fully. However, suppose past performance of tech-based analytical tools in the asset management field are any indication. In that case, the chances of AI making marked improvements are unlikely while opening up a new can of risks. It’s possible that the proliferation of AI could create chaos and volatility nobody could have predicted.
Savvy investors avoid disruption and potential chaos when it comes to where they put their capital, and I guess that they will avoid handing their money over to AI to manage their money where the risks are unknown and immeasurable.
Ultra-high-net-worth investors (UHNWIs) are ultra-wealthy because they don’t chase the next big thing. They stick to what works, and what works is real estate. And given AI’s infiltration into multiple industries and the world of investing, these sophisticated investors will gravitate to real estate even more, where AI will have a hard time replacing humans.
Why will AI have a hard time replacing managers of real estate funds?
Because there are things only humans can do when requisitioning, screening, analyzing, and acquiring assets. Having boots on the ground and specialized expertise gives local real estate fund managers advantages that AI is incapable of gaining.
These are some of the advantages flesh and bone managers have when it comes to investing in local tangible assets that AI will never be able to grasp:
- Local real estate investors are in ideal positions for analyzing deals. Nothing beats the familiarity of local and regional economies and communities for assessing the feasibility of investment opportunities.
- Local investors can touch and feel an investment. Real assets can be inspected in person.
- Local investors have an intuitive understanding of their market, which allows them to assess risk better than competitors from outside the market.
- Local investors have a pulse on the local economy and businesses that are moving in and out.
- Local investors are able to take advantage of local economic incentives like local tax breaks or revitalization incentives not found elsewhere.
Partnering with seasoned experts and real estate investors who have ties to their chosen real estate market allows you to benefit from a reliable and consistent asset class that is insulated from Wall Street volatility and insulated from the potentially harmful reach of AI.
AI could very well be the next retirement killer, but you can protect your retirement by putting your money out of harm’s way in an asset like real estate that still relies on local knowledge, contact, and connections.
Kyle Jones is a co-founder and Key Principal of TruePoint Capital, LLC. Kyle is responsible for the company’s strategic planning, investment decisions, asset management, and overseeing all aspects of the company’s financial activities, operations, and investor relations.
Kyle obtained a Bachelor of Science degree from Texas State University – San Marcos, where he also played Division 1 Baseball.