TL;DR:
- Big businesses in the US have been dominant since the late 19th century, employing more people than small businesses.
- The rise of artificial intelligence (AI) is likely to change this landscape, leading to fewer Americans working for big companies.
- Companies like Midjourney and OpenAI are achieving remarkable success with minimal staff, thanks to AI and automation.
- The political power of big businesses may decrease as AI reduces the need for a large staff and lobbying efforts.
- Immigration policy may become more targeted towards individuals who can contribute to smaller, highly productive teams.
- Small businesses relying on AI will need to carefully select the right talent to oversee automated systems, leading to high compensation and a partnership-like culture.
- Investing will evolve, with fewer Americans owning businesses in their stock portfolios and venture capital becoming more important.
- While not all large companies will shrink, working for big businesses may become a temporary phase in a person’s career.
- The rise of AI may make big businesses more mysterious and less prevalent in the future.
Main AI News:
In the late 19th century, big business became a staple of American life and now employs more Americans than small businesses. However, the growing prominence of artificial intelligence (AI) may be about to change that. Consider Midjourney, a company that uses AI to generate images.
Despite being widely known in its field, the company only has 11 full-time employees. The reason for this is that much of the work is done by computers and AI. While the rise of AI may not lead to mass unemployment, it will likely lead to a shift in the job market towards personal services such as elder care, which are typically provided by smaller local firms. As a result, fewer Americans may end up working for big businesses.
Another example is OpenAI, the producer of ChatGPT, which has been described as the most rapidly growing consumer technology product in history. Despite its success, OpenAI only has about 375 employees. In contrast, Meta has over 60,000 employees. While OpenAI will make more hires in the future, it is time to reset expectations for what a major tech company looks like. As other companies start using AI to automate their operations, the political power of big business may decrease. With fewer staff and less bureaucracy to support their lobbying efforts, the political influence of big businesses will likely wane.
The effect of AI on public policy will likely be significant as well. Big business has traditionally favored a broad increase in immigration, but as smaller, more specialized firms become more prevalent, there may be less political support for this policy. Instead, immigration policy may become more targeted towards identifying individuals who can contribute to tight, highly productive teams in these smaller businesses.
For small businesses that rely heavily on AI, hiring the right people to oversee automated and AI-managed systems will become increasingly important. Talent selection will become a critical skill, and those working in smaller units will command high compensation. These businesses will likely have cultures that adhere more closely to those of partnerships or sports teams, with mutual internal monitoring becoming a crucial aspect of the workplace.
Investing will also change as a result of the rise of AI. Americans will be less likely to own businesses in their stock portfolios. Since smaller businesses will not have the same need to go public to raise capital for expansion, they will remain privately held. Venture capital will become more critical, but most solo investors will face SEC restrictions on making venture investments and will have to put their money elsewhere.
Not all large companies will shrink, however. Certain customer-service companies, like Starbucks, might face challenges in automating their core activities and will likely maintain their dependence on national branches. However, it is worth noting that numerous Starbucks employees eventually transition out of their roles and pursue opportunities in other sectors of the labor force. As a result, working for large corporations may become a transient phase in individuals’ careers, typically undertaken during their youth and not revisited later on.
In the future, working for big businesses may become more mysterious and exotic, similar to talking to someone who works as a spy or on an oil derrick. While it may be hard to imagine now, the rise of AI may lead to unexpected consequences for the role of big business in American society.
Conlcusion:
The increasing prominence of artificial intelligence (AI) in the business landscape is set to have significant implications for the market. The rise of AI-driven automation will likely result in a decrease in the number of Americans working for big businesses. As smaller, more specialized firms utilizing AI become prevalent, the power dynamics and political influence of big business may diminish. Market dynamics are expected to shift, with a potential decrease in support for broad immigration policies and a focus on targeted talent acquisition for highly productive teams.
Additionally, investing patterns may change, with a decline in public ownership of businesses and a rise in the importance of venture capital. Overall, the market will witness the evolution of workplace cultures, talent selection processes, and investment strategies as AI continues to reshape the business landscape.
