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Moody's: Generative AI Will Destroy Service Industries and Cut Jobs
24.01.2024
Generative artificial intelligence (GenAI) is still in its infancy, but as the technology spreads, the business services sector could see big changes. The Moody's 2024 AI Outlook study found that GenAI has the potential to disrupt a range of industries, including legal and business services, ComputerWeekly reports.

PwC, which found that a quarter of CEOs expect to see workforce reductions due to AI. According to a report from the International Monetary Fund (IMF), also cited in the Moody's study, AI could affect 40% of global employment, with developed countries being hit harder than developing countries and emerging markets.

While AI offers a way to improve business productivity and create new jobs, Moody's predicts that in some fields that require middle and high levels of education and do not involve face-to-face interaction, the transition will be difficult.

Moody's research notes that AI is still in its early china mobile database and is unlikely to have a material impact on companies' credit quality in the coming year. The report's authors note that rising spending on AI, model improvements, and edge computing will accelerate AI adoption, which could result in some companies suffering as models begin to compete.

In particular, the report's authors note that ready-made tools that can effortlessly create and analyze text could disrupt the work of a number of companies, primarily in the business and consumer services sector.

Moody's believes that legal services providers are the most vulnerable. "AI tools can accurately and efficiently perform document review and other text services, which could make some law firm services redundant," the report's authors warn.

Business process outsourcing is another area that is at risk of being disrupted by advances in AI. According to Moody’s, companies that provide outsourced business services could lose revenue. AI reduces the number of employees needed to serve customers, but Moody’s believes these companies can adapt by shifting to technology services or higher-skilled functions.