AI will ‘exacerbate’ wealth inequality and help ultra-rich: Ex-Google exec
A dress worn this week by Democratic Congresswoman Alexandria Ocasio-Cortez (D-NY), which bore the message "tax the rich," set off a wave of debate over how best to address wealth inequality, as Congress weighs a $3.5 trillion spending bill that includes tax hikes on corporations and high-earning individuals.
The debate coincides with the ongoing pandemic in which billionaires, many of whom are tech company founders, have added $1.8 trillion in wealth while consumers have come to depend increasingly on services like e-commerce and teleconference, according to a report released last month by the Institute for Policy Studies.
In a new interview, artificial intelligence expert Kai Fu-Lee — who worked as an executive at Google (GOOG, GOOGL), Apple (AAPL), and Microsoft (MSFT) — attributed the rise of wealth inequality in part to the tech boom in recent decades, predicting that the trend will worsen in coming years with the continued emergence of AI.
"We can just already see all the internet companies," says Lee, the co-author of a new book entitled "AI 2041: Ten Visions for Our Future." "Without AI, they probably would be only worth half of what they're worth, because AI helped them monetize."
"When it's simultaneously making a small number of people ultra-rich and making many people jobless," he says. "That is the wealth inequality problem that AI will exacerbate."
Five of the six largest companies worldwide are in the tech sector, including three companies that each boast a market cap above $1 trillion: Apple, Microsoft, and Google.
While some of the founders of tech giants are among the world's richest people, their technological advances have not delivered comparable income gains for workers. Since the 1970s, technology has helped enable productivity growth of 61.8% while hourly pay has risen just 17.5%, according to a report updated last month by the left-leaning Economic Policy Institute.
The World Economic Forum, host of the annual conference in Davos, Switzerland, found in 2016 that technology had already worsened inequality in upper- and middle-income countries and would "eventually spread to the entire world."
The trend of wealth concentration not only transcends borders but also sectors, since AI will replace rote jobs across blue- and white-collar work, Lee said.
"That will extend into all the other industries," he adds. "So the tycoons there will be more numerous, and they will be even richer and richer at the same time, because AI is developing human intelligence equivalence."
Kai-Fu Lee has been at the center of AI development for decades, ever since he helped develop speech recognition and automated speech technology as a doctoral student at Carnegie Mellon University.
Since 2009, he has served as the CEO of Sinovation Ventures, a tech-focused venture capital firm in China with over $2.5 billion in assets under management.
Speaking to Yahoo Finance, Lee predicted that automation will eliminate jobs across the economy in the short term, but eventually it will create more jobs than it kills.
"Just in software, you don't even need robotics," he says. "Then blue-collar work, visual inspection, assembly-line work, waiters and waitresses and many of the jobs in factories and warehouses, the pickers at Amazon, the cashiers [at the] grocery store," he adds. "So when you add all that up, it's a substantial number of jobs.
"I think the next 20 years, it will take away more jobs than it creates. But over time, it will create many jobs," he says.
Why Williams-Sonoma CEO calls the labor shortage a ‘big migration’
Investing app Betterment weighing how to 'offer crypto': CEO
Facebook board's Trump decision shows Big Tech is 'way too powerful': Elizabeth Warren
Insurance claims will reach pre-pandemic levels this year: Aflac CEO
Read the latest financial and business news from Yahoo Finance
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTube, and reddit.