Amazon’s Expansion of Its AI Endeavors Symbolizes Changing Economic Landscape
Amazon’s recent announcement to lay off 14,000 corporate employees calls the future role of artificial intelligence into question. Source: Digital Watch Observatory.
Over the past few years, artificial intelligence (AI) has become increasingly prevalent in Americans’ lives. Between students’ use of ChatGPT to software coding assistance, to social media memes, to healthcare diagnostics, the technology has infiltrated much of society. While AI has had a positive effect on our lives in many ways, it is unclear whether the pros will outweigh the cons in the long term. AI poses a threat to social interactions, media trust, and, more recently, the job market. For instance, Amazon’s recent decision to cut 4% of its corporate workforce and redistribute those funds toward its new AI endeavors signals a shift in companies’ intentions regarding AI expansion, as Amazon intends to “invest very aggressively in AI.” In conjunction with threats posed by other economic factors, such as tariffs, funding cuts, the government shutdown and post-COVID effects, Amazon’s AI expansion presents a significant threat to Americans’ employment security that could manifest itself sooner rather than later.
Artificial Intelligence
The reach of artificial intelligence has intensified over the past several years. While it has been utilized for comedic bits on social media and for assisting students when it comes to studying and outlining essays, there are sides to it that are much more serious. Schools across the world have installed schoolwide AI policies as a result of students using ChatGPT to cheat on exams and write their papers, with some imposing punishments as severe as expulsion. Additionally, there have been several instances where deep fakes — images and videos that are digitally altered to appear as something else or say something that was not actually said — have posed significant international threats. One of the worst incidents occurred in 2022 and involved an altered video of Ukrainian president Volodymyr Zelenskyy seemingly surrendering to Russia, as part of an “information warfare” tactic utilized by Russian hackers. Even as it pertains to social media, a seemingly harmless use of AI, it is increasingly difficult to determine whether certain content is real or fake. This type of humor surrounding artificial intelligence is harmless when it involves unserious topics — such as videos of pets or food — but the ability to augment reality on platforms that spread content so rapidly could become dangerous if it is used in the wrong way.
As artificial intelligence makes its way into more and more aspects of everyday life, it is important to remain aware of its magnitude and potential harm as it relates to our social interactions and the preservation of our originality. Recently, the decisions of companies like Amazon to expand their artificial intelligence branches have shifted the technology’s target toward the job market. AI is a massive venture, and it is growing at a pace with which the general population cannot keep up. Consequently, it is unclear just how severe these job losses and competition for employment will become.
Amazon
Up until this point, AI has mostly been used for supplemental purposes, such as ChatGPT and iPhone features such as Apple Intelligence, but the recent job cuts at Amazon are a symbol of AI’s growing disruptions. In September, Amazon announced the elimination of 14,000 jobs in its corporate sector. The money saved from these cuts will be used to fund over 1,000 generative AI services, including a $10 billion investment in a campus located in North Carolina. The company plans to spend the same amount on projects in Mississippi, Indiana and Ohio. Neil Saunders, GlobalData’s managing director, stated that the layoffs “represent a deep cleaning of Amazon’s corporate workforce.” As companies’ aspects transform from human to computer, trust in these companies may diminish, as many people are unfamiliar with the ins and outs of AI and hold concerns about its role in everyday life. However, some sources state that AI’s increased presence may not be a cause for concern, as the transition away from human labor is likely to be a gradual one, and “the layoffs and buyouts at big tech companies do not appear to have been driven by the automation of white-collar jobs directly.” The same source predicts that layoffs will occur as companies seek to save money while developing their AI branches, but will eventually engage in more hiring later, deeming it “a long period of marginal changes at established companies before new businesses eventually change the way work is staffed and organized.” While various sources hold various theories regarding the outcome of AI’s continual integration into large companies, the reality is that no one truly knows the long-term effects that this technology will have on company structure and employment. Amazon’s decision to cut 4% of its workforce may mark the beginning of AI’s tangible effects on society.
Other Factors
The expansion of artificial intelligence is occurring at a time in history where political uncertainty and lack of trust are running rampant in the United States. This year’s funding cuts in areas such as scientific research, Department of Justice initiatives and nonprofit organizations have resulted in hiring freezes and an increasingly competitive job market for individuals seeking employment, as the current political climate has fueled “hesitation among employers to hire new workers amid wider economic uncertainty in the midst of President Donald Trump’s shifting tariff policies and federal spending cuts”. Additionally, the longest government shutdown in United States history, starting Oct. 1 and ending Nov. 12, delayed the release of job reports, inhibiting the ability to assess the status of the economy. According to CNBC, “In the absence of critical data points, alternative data is the only game in town when it comes to measuring current conditions. In a nutshell, various metrics show the U.S. labor market appears to be plodding along, with a sharp slowdown in hiring and scattered signs of an increase in layoffs.” As of January, polling displays that only 37% of Americans believe that the United States is headed in the right direction, a discouraging number when it comes to national economic confidence. Another factor playing into this unstable environment is the fact that businesses have only recently recovered from the damages done during the Covid-19 pandemic, a period where the economy majorly suffered from mass layoffs, slowed growth and decreased trust in the government.
A New Issue
Although the effects of COVID-19 have had an influence on today’s economic environment when it comes to how businesses are run, there is a significant difference between the layoffs during the pandemic and the layoffs occurring at Amazon currently. During COVID-19, businesses were forced to let go of employees as a result of their revenue loss. In contrast, Amazon actually thrived during COVID, as online ordering became the norm for most of the world. Amazon is not cutting jobs because it is struggling financially, as it is “operating from a position of strength,” it is cutting jobs because it has made the conscious choice to fund artificial intelligence endeavors over human employees. This business decision represents a new threat to employees across the nation: the possibility of being laid off is always present when a company is struggling, but it is now also present when the company is thriving, and that is thanks to AI. This new reality will likely add to the uncertain environment the United States is currently experiencing, as artificial intelligence has added another reason for employees to lose trust in their employers.
While it seems inevitable that artificial intelligence will hold a significant societal role in the future, the new technology should be handled with care, as its many positive aspects come with potentially harmful ones. AI has developed rapidly over the past few years, and recent advancements have shown that this is only the beginning. As companies like Amazon attempt to keep up with other “tech giants” such as Meta, Google, and OpenAI, it risks becoming a contributor to the precarious economic and political state that currently encompasses the nation. Amazon’s recent job cuts signal AI’s continually increasing presence in our world, and we must keep a close eye on its short and long-term effects, which could influence not only the economy but society as a whole.