AI Isn’t a Productivity Miracle Cure…Yet

In corporate boardrooms, the promise of AI-fueled productivity gains has clearly resonated. A CNBC poll found that 44% of companies had AI adoption as the top line item in their tech budgets. And a survey from Upwork found a whopping 96% of C-suite leaders think AI will boost worker productivity.

But not everyone is so optimistic. That same Upwork poll found that 77% of employees believe AI has actually increased their workload. Two in five said their company is asking them to do too much because of AI, while 47% don’t know how to meet the productivity goals set by their employers.

The Price of AI

It’s not just employees questioning the effectiveness of AI. Investors worry about costly investments in AI and whether it will yield the promised productivity gains. This contributed to the turbulence that tech stocks experienced over the past weeks.

Meta (META) could spend as much as $18 billion on AI this year, according to Business Insider, citing analyst estimates. And last month, The Information reported that OpenAI, the Microsoft-backed maker of ChatGPT, could lose $5 billion in 2024.

“AI technology is exceptionally expensive, and to justify those costs, the technology must be able to solve complex problems, which it isn’t designed to do,” said Jim Covello, head of global equity research at Goldman Sachs, in a report from June.

The bottom line: AI tools need to prove they can boost productivity enough to justify their massive cost. And while that day might arrive, it’s not here yet.

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