AI Fails Over 96% of Jobs

Despite positive earnings last week, Nvidia is still being viewed as overvalued by Wall Street. The share price fell almost 5% and has struggled to recover. It’s not just Nvidia either. The entire Nasdaq dropped around 1.7%, even before tensions with Iran escalated.

This may reflect a combination of factors. Firstly, the AI market itself may be reshuffling. As discussed previously, Google’s TPUs could take an estimated 10% of Nvidia’s revenue each year. At the same time, open-source AI projects are proliferating. These projects may prioritise rapid development over safety constraints. China is also pushing to remain competitive in the AI race while reducing its dependence on US technology.

Secondly, despite AI’s impressive achievements so far, a recent study offers a reality check to the idea that AI will immediately replace large numbers of jobs. A study called the Remote Labor Index surveyed 12,000 paid tasks from Upwork and found AI failed to complete more than 96% of them successfully. The main issues included ignoring the provided brief, losing track of multi-step tasks, missing required items, and producing files that were corrupted or incomplete.

The study suggests that instead of relying on one all-purpose AI, the future may lie in specialised agents trained for specific tasks, much like how humans are employed. These systems will also need significant improvements in multitasking and document handling, particularly when maintaining context across multiple steps or accurately confirming whether a task has been completed.

Finally, stepping back to the broader picture, interest rates continue to weigh on economies around the world. This environment tends to make technology companies with uncertain future profits less attractive compared with commodities that are needed today. At the same time, Federal Reserve officials continue to emphasise fighting inflation while a major conflict threatens oil supply chains. The potential impact on risk markets appears to be receiving little attention.

Gold and silver have been holding their support levels, although both remain in dip territory. Silver’s sharp correction has so far stabilised, and it remains unclear whether further downside will follow. The factors above have been supporting bullion prices, and this was before hostilities escalated. Whether Trump’s war proves to be a “four-week” event or something longer that ultimately prompts another round of monetary stimulus remains to be seen.