Will AI Crowd Out Humans?
By Jane Mulcaster
Why would Microsoft, a corporation that’s making record profits with billions in cash reserves, send pink slips to 6,000 workers, 3% of its workforce? Amazon, Meta, and Google have likewise laid off thousands of workers so far this year. The Mercury News reports that the Bay Area alone has shed more than 11,000 tech jobs in the first three months of 2025.
Reducing costs and hedging against global economic uncertainty are among the reasons, the companies say. But so is the “quest for efficiency” as AI capabilities expand and adoption grows. Microsoft CEO Satya Nadella said that as much as 30% of the company’s code is now written by AI, according to the LA Times. Forbes reports that “tech firms are cutting middle managers and embracing AI-driven or self-led teams. The rise of AI and automation is displacing jobs, particularly in tech.”
Industry watcher Genevieve Harrison notes that Microsoft’s cost for retaining the humans who perform these jobs is a “rounding error” in the face of billions in profit. In her view, the Microsoft cuts represent the late stages of digital capitalism, “where human capital has become the most dispensable asset on the balance sheet.”
The Promise – and Price – of AI
AI is evolving fast. Although the wider discipline of machine learning has been under development for decades, the popular understanding of AI came into focus in late 2022, when ChatGPT first emerged. Generative pre-trained transformers (GPTs) and large language models (LLMs) train on massive amounts of data available on the internet to generate fully developed text, translations, summaries, and analysis in milliseconds. Related technologies are also very efficient at writing code (coding assistants). Engineers are also developing AI agents that specialize in discrete tasks, which can interact with each other to complete whole processes autonomously, such as planning and booking a travel itinerary (agentic AI).
The ultimate goal for AI visionaries is artificial general intelligence (AGI), a theoretical state of machine learning that can fully emulate human understanding, learning, and reasoning. Although this level of AI isn’t yet possible, today’s AI models are a clear precursor to AGI and could further automate human involvement in fields like customer service, coding, healthcare, autonomous vehicles, education, manufacturing, financial services, and research and development.
AI automation promises efficiency that can improve bottom lines and boost shareholder value. But while efficiency is important, AI comes with costs. Every LLM query, including the AI overviews Google now returns automatically when you enter a search, consumes ten times more energy5 than a standard search. Saying ‘thank you’ to ChatGPT drives up the costs further. Moreover, as the layoffs demonstrate, companies are figuring they’ll need fewer humans as they ratchet up investments in AI. While Elon Musk’s DOGE chainsaw is a bit dramatic, it may also represent the modern–and more efficient–version of the proverbial axe in the near term.
The Value of Human Values
AI represents a new paradigm because it accelerates and automates how we access and process information. Every new disruptive technology comes with a learning curve and societal adjustments.
Business in general, and Silicon Valley in particular, tends to prioritize shareholder value over human value. As AI assistants mature, companies will experiment with just how much of the business they can automate before they hit a threshold of diminishing returns.
As society adjusts to living with AI, I predict there will ultimately be a greater value placed on human originality, ingenuity, and quality of life, and that AI will settle into the role of helper rather than complete replacer. But I think the road of experimentation on the way to balance will likely be rocky and paved with pink slips.
Jane Mulcaster is the Post’s Bay Area correspondent and writes from her home office in San Jose.
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