Education Stocks Implode as Jobs Fade Amid AI Threat
Education-focused stocks are feeling the heat amid the euphoria around Artificial Intelligence. Shares of California education company Chegg suffered the biggest loss ever, dropping by more than 49%. The implosion came on the company warning that fewer students are signing up for its services amid the AI revolution. The loss comes on a report by the World Economic Forum indicating that up to 14 million jobs could be lost in the next five years amid the AI revolution.
AI Ripple Effect
The education industry is one sector that could benefit from Artificial Intelligence, but with the risk of many people losing jobs and some companies losing big business. Shares of UK education publisher Pearson Plc fell 11% in London, signaling growing investors’ concerns about the company’s long-term prospects. Atlem Global Education stock was down 9.8% as 2U Inc. fell 10.9%
The losses are not limited to the education sector, as AI is having a ripple effect in almost every sector. French call center-operated Teleperformance SE has already hinted at the possibility of automating up to 30% of its call volumes using AI-powered tools. So, while the technology is expected to significantly phase out some jobs, it is also poised to benefit some companies.
International Business Machines Corp has already hinted at the possibility of pausing hiring in some jobs as part of a cost reduction push. However, the pause will mostly affect jobs AI-powered apps and tools can handle efficiently.
Increased focus on AI has also fueled demand for startups and companies working on revolutionary technology. Nvidia is one of the stocks on an impressive run, having emerged as a Wall Street darling as a key supplier of chips that will power chatbots. Microsoft stock has also seen its stock attract significant bids on integrating ChatGPT into its search engine in the race to curtail Google’s monopoly in the sector.
Artificial Intelligence’s edge in finding answers to questions quickly is seen as a game changer in the search business. For instance, it is expected to increase the time people spend on a search engine home page, seen as one of the reasons why Microsoft integrated ChatGPT in Bing. Nevertheless, it could spell more trouble for websites that rely on click-throughs which could see their ad revenue come under pressure.
AI Regulatory Concern
Amid the increased focus on generative AI, it is still being determined how regulators will regulate it. The fact that technology can eclipse human intelligence poses significant risks. For instance, the technology landing in the wrong hands could result in more harm than good.
Geoffrey Hinton, commonly referred to as the godfather of AI, has already warned that companies are racing toward danger with an increased focus on AI products. After quitting his job at Google, where he worked for more than a decade, Hinton says AI, if misused, could be a tool for misinformation in addition to posing significant risks to jobs.
As companies continue to improve their AI systems, there is a growing risk that they could become dangerous. For instance, there is the risk of the internet being flooded with false photos, videos, and text that the average person may not decipher.
