Investing.com -- It has become a reliable feature of the modern news cycle: the sun rises, the markets open, and a billionaire or executive issues a dire warning about the future of artificial intelligence. We simply can’t seem to go a day without a new alarm bell ringing.

The latest harbinger of technological upheaval is Bridgewater Associates, one of the world’s largest hedge funds. According to Bridgewater Chief Executive Officer Nir Bar Dea, AI could dislocate nearly one-fifth of the US labor market if society fails to prepare and regulators don’t step in.

“Because we’re so bullish on the positive implications of AI, we also recognize that anything that could change the world that much for the positive could also have severely negative implications,” Bar Dea said on a new episode of The David Rubenstein Show: Peer-to-Peer Conversations. “Our estimate is that AI can dislocate 18% of American labor. So think about the magnitude of the societal breakdown that could happen.”

Bar Dea is far from the only executive at the $100 billion firm waving a red flag. Managing Chief Investment Officer Greg Jensen—notably one of the earliest backers of OpenAI and Anthropic PBC—likened the current complacency around AI to the earliest days of the pandemic, when the public largely failed to appreciate the looming risks of Covid-19. Meanwhile, billionaire investor Paul Tudor Jones recently characterized the approaching AI threat as being “like waiting for a Category 6 hurricane.”

Yet the tenor of these warnings has begun to shift. The latest alarm bells are arriving almost back-to-back, but the conversation is becoming decidedly more economic and less apocalyptic.

Anthropic itself warned about potentially severe consequences from AI in a filing this week, highlighting the risks posed by increasingly capable systems. That warning came alongside a growing wave of concern about what AI could do to jobs and the broader economy. We have moved past the frantic market scares sparked by Citrini Research’s deep-dives into AI-driven structural collapse, while the latest debate increasingly focuses on whether AI will eliminate jobs, rather than whether it could eliminate humanity.

Even the loudest doomsayers are revising their scripts. Elon Musk, who famously warned that developing AI was akin to “summoning the demon,” struck a markedly more optimistic tone at the White House on Tuesday. Asked what people should do if AI eliminates “laptop jobs,” Musk said: “Jobs are going to change. Jobs have always changed.” He compared the shift to the disappearance of human “computers” whose jobs once involved performing calculations, saying he expects an “evolution of roles.”

Musk said his “most likely outcome” was an “age of abundance” in which “we don’t have just universal basic income, we have universal high income.” With robots and superintelligence, he said, everyone could eventually have better medical care than anyone at the White House, “including me.”

Bridgewater, too, is taking a deeply pragmatic approach to the "societal breakdown" it is forecasting. Rather than running from the Category 6 hurricane, the 51-year-old firm is building windmills to harness it.

Technology is crucial for the firm’s global macroeconomic investments. “If you’re going to build and understand how the world works, you want to combine humans and technology,” Bar Dea explained.

In 2024, Bridgewater raised almost $2 billion for an AI-driven fund designed to let technology generate investment insights while humans manage the risk. The strategy is working: the AI fund has consistently beaten the market while generating entirely different ideas than Bridgewater’s traditional human traders.

“That just blows your mind thinking what the future holds,” Bar Dea said. However, he cautioned that off-the-shelf tech isn’t the magic bullet. “You have to have unique data, unique trainers” to actually maintain an edge.

Original Article