(ABC) — The top financial officer in New York City on Thursday warned that artificial intelligence could put thousands of workers in the nation’s largest metropolis out of a job as soon as this year, while acknowledging that the ultimate impact of AI remains uncertain.
The only sure thing, New York City Comptroller Mark Levin said in a new report: AI promises a “radical transformation” in the globe’s financial capital, influencing everything from wages to pension payments to Wall Street profits.
Levin, a Democratic former New York City Council member, predicted a range of scenarios both positive and negative, gauging the likelihood of outcomes as bullish as a broad-based productivity boom and as detrimental as mass layoffs.
City policymakers stand to play a central role in the technology’s ultimate fate, Levin added, calling for urgent steps like creating a multi-billion dollar financial cushion in case economic calamity strikes.
“There is no city in America – and perhaps none on earth – more exposed to both the promise and peril of artificial intelligence than New York City. And there are few places with more power to steer the transformation ahead,” Levin said in the report.
New York City hosts “hundreds of firms competing to make New York the capital of applied AI,” Levine added, as well as roughly one million workers who labor in Manhattan office towers, many of whom stand at risk of AI disruption. The high stakes exemplify a reckoning likely to play out in cities nationwide, he said.
“Uncertainty is not an excuse for inaction,” Levin said, saying local policies should complement much-needed efforts at the federal level. “We are not helpless.”
The report comes as the stock market and the economy overall have both come to increasingly rely on massive spending on AI to propel continued growth, even as companies warn of job losses tied to the technology.
A wave of thousands of job cuts attributed to artificial intelligence over recent months has taken hold in industries as diverse as tech and airlines. In April, AI company Anthropic opted against releasing its latest model, Mythos, expressing concern that the tool could be used to bypass cybersecurity protections across the internet.
Blockbuster earnings from chip giant Nvidia on Wednesday, meanwhile, rebuked fears of a slowdown in the rip-roaring pace of growth for the artificial intelligence behemoth.
In his report, Levin assessed five potential scenarios for AI uptake in New York City, focusing on potential economic downsides and benefits of each. The forecast draws upon national AI scenarios developed by Moody’s Analytics, adapting them for New York City, Levin said.
In the most likely outcome, dubbed the “AI-Empowered Economy,” Levin predicted that AI would improve productivity while delivering moderate economic growth, including an average of about 52,000 jobs added each year through 2030. Levin pegged the likelihood of this outcome at 35%.
A more pessimistic scenario, which Levin called “AI Falls Flat,” foresees a drop-off in AI investment and an accompanying stock market slide. If this outcome comes to pass, New York City would lose about 52,500 jobs as soon as this year, suffering temporary ill-effects akin to those that coincide with a recession, Levin said. The probability of this scenario, he added, stands at 25%.
Other possible outcomes include “faster-than-expected AI” adoption that improves productivity but replaces jobs, as well as an “AI shockwave” that upends white-collar employment.
The “most optimistic” of the five scenarios, Levin says, is a “Productivity Boon,” in which AI-driven productivity growth complements job growth, rather than displacing it, boosting compensation in the process. Levin puts the likelihood of this outcome at 15%.
To be sure, Levin said, the potential economic impact of AI remains highly uncertain. Other economic trends unrelated to AI could also hold significant implications for the city’s economy, Levin added, pointing to a historic oil shock that has driven up fuel and grocery prices.
Levin touted the role of local government in responding to the changes wrought by AI, whether they prove favorable or otherwise.
“These are not questions we can leave to Silicon Valley, Washington, or the market alone. New Yorkers must help shape the future ourselves,” Levin said.