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AI could hit 40 percent of jobs and worsen inequality, says IMF

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New research from the International Monetary Fund (IMF) says Artificial Intelligence could impact around 40 percent of all jobs.

The study shows this could be as high as 60 percent in more developed economies, and says half of the workforce could see increased productivity due to AI integration.

However, the IMF warns AI's capability to undertake essential tasks currently performed by humans could reduce labor demand.

This could impact wages and potentially lead to job losses.

Kristalina Georgieva, the IMF's managing director, said: "In most scenarios, AI will likely worsen overall inequality."

She stressed the need for policymakers to tackle this "troubling trend" to "prevent the technology from further stoking social tensions."

AI has rapidly expanded and business leaders, including Elon Musk have raised concerns about its impact.

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Lesser impact on low-income countries

The IMF predicts in low-income countries, only 26 percent of jobs will be affected by AI.

Georgieva added: "Many of these countries don't have the infrastructure or skilled workforces to harness the benefits of AI, raising the risk that over time the technology could worsen inequality among nations."

The report also says while higher-income and younger workers might enjoy wage increases post-AI adoption, lower-income and older workers could lag behind.

She added: "It is crucial for countries to establish comprehensive social safety nets and offer retraining programmes for vulnerable workers.

"In doing so, we can make the AI transition more inclusive, protecting livelihoods and curbing inequality."

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This IMF analysis comes as the World Economic Forum in Davos, Switzerland begins.

Global leaders are set to discuss AI, especially in the wake of popular applications like ChatGPT.

Amid this growing interest, AI is facing more regulatory scrutiny globally.

Last month, the European Union made a provisional agreement on the first extensive laws to govern AI use.

The European Parliament is set to vote on these AI Act proposals early this year, though any new laws would not be implemented until at least 2025.

Major players like the US, UK, and China are yet to release their own AI regulations.

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