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Qualcomm Transitioning into Intelligent Edge Firm on AI Opportunity

Qualcomm has made a name for itself on developing chips that power smartphones. But, facing smartphone saturation and stiff competition in the business, the company is already plotting its next phase of growth. Its primary focus is transitioning from a communications company to an intelligent edge computing heavyweight. Its focus is on artificial intelligence, a technology already causing havoc and ripple effects in various sectors.

Qualcomm AI Transition

According to senior vice president Alex Katouzian, the future is all about developing chips that will enable AI-powered devices. The chips that the company is working on should help smartphones harness the full potential of AI technology, right from processing photos to detecting malware. In addition, it should harness search on the internet and enable people to access services or networks by simply tapping their phones.

Qualcomm is positioning itself amid the AI arms race, having already shipped nearly 2 billion worth of AI-capable products. Nevertheless, it is Nvidia that has appeared to have an edge over other chip makers and is seen as a front-runner with its graphics processing units that are in high demand. The stock has been one of the best performing, with the company’s market nearing the $ 1 trillion milestone.

Nvidia has become a Wall Street darling in the aftermath of the company issuing a better-than-expected outlook. The company’s revenue outlook for the current quarter beat estimates by more than 50%, fueled by expected demand for AI-capable GPUs. In contrast, Qualcomm issued a disappointing outlook as it continues to face sluggish demand for mobile devices from where it accrues most of its remains on chip sales.

AI Chips Opportunity

Demand for AI-capable chips has been rising as the growth in connected devices and data traffic continues to fuel a significant increase in data center costs. It’s becoming increasingly clear that hosting all data from connected devices on the cloud might not be possible. Increased focus on AI is expected to trigger a significant increase in AI-powered chips, which should trigger strong business for Qualcomm and the like.

Qualcomm executives insist that the future of AI will require more computing power. Given that the cloud alone would not be able to provide the much-needed power, the company has already sensed a window of opportunity that it plans to take advantage of with its transition into an intelligent edge computing firm.

However, it is one of many companies pumping billions of dollars into the emerging opportunity. Nvidia has been the front-runner with the likes of Arm Ltd and Asustek Computer, also working on chips that will power AI-related services. Stiff computing is good for the overall industry as it should give rise to powerful chips capable of unlocking the full potential of revolutionary technology.

Nevertheless, the technology faces an uncertain future amid calls for increased regulation. There are growing concerns that if tech companies are left to do as they wish with the technology, there could be serious ramifications given that the technology supersedes human intelligence. Tesla CEO Elon Musk has been the most vocal in calling for increased regulation.

US Mutual Funds Underperform on Shunning Tech Stocks 

US Mutual funds are paying a hefty price for shunning tech plays. Concerned by deteriorating economic conditions and the US Federal Reserve hiking the benchmark rate at the fastest pace in decades, most fund managers stayed clear of tech stocks. Unfortunately, the defensive play has come to bite, with tech stocks spearheading a ferocious rally of the market amid solid bullish bets.

Tech Stocks Ferocious Rally

Tech-heavy Nasdaq 100 is already up by more than 24%, outperforming the S&P 500, which is only up by about 9% and posting its best start to a year since 1998. The rally in the tech space has mostly been fueled by increased investor interest in technology companies betting big on artificial intelligence technology. The frenzy around artificial intelligence has helped investors shun any concerns about deteriorating economic conditions.

Only a third of the US mutual funds have been able to match the gains posted by the US benchmarks compared to the industry average of 38%. Currently, most funds are 15% points underweight the performance of big tech plays, including Apple, Microsoft, Tesla, Amazon, Meta Platforms, Nvidia and Alphabet, which are behind the ferocious rally in the market.

Nevertheless, the outperformance being experienced in the overall US equity market has been influenced by a small group of companies. Investors have been going long companies that are doing exceedingly well amid the high-interest rate environment. Consequently, most have been ramping up positions in companies that have posted stellar quarterly earnings results.

In addition, investors have been shunning cyclical industries that are susceptible to deteriorating economic conditions. As a result, companies that rely on non-essential products have seen their revenue base take a significant hit, affecting earnings as investors remain tight-lipped on their cash amid the high inflation levels and the ever-growing risk of recession.

Strategists Warnings

Mutual funds resorted to cheaper plays at the start of the year, staying clear of defensive and growth sectors amid growing concerns of economic recession. For example, most opted to stay clear of tech plays on concerns their operations and long-term prospects would be hurt significantly by the FED hiking interest rates and the economy plunging into recession.

While the recession risk is still in play, retail and institutional investors have shunned the concerns opting to pump more investment capital into tech plays and growth stocks. As a result, investors have generated significant returns even as warning bells become the order of the day on Wall Street. Now may be the best time to lock in some profits if concerns raised by Wall Street strategists are anything to go by.

Strategists from Morgan Stanley and JPMorgan have warned that the market remains overstretched at current levels. Technical indicators are already shouting oversold conditions as the strategists warn the market has rallied against deteriorating fundamentals and technicals.

Likewise, most tech plays are less attractive at current levels compared to the start of the year. The elevated valuations mean investors would be chasing trades on investing at current levels as it becomes clear a potential correction could come knocking before another leg higher.

Musk Calls for Third AI Force and Hints of Twitter Profitability

There needs to be a third force to rival Google and Microsoft on Artificial Intelligence. That’s the sentiment held by Tesla CEO Elon Musk, who has been vocal against the two tech giants being left to call the shots and steer innovations around the revolutionary technology.

Need for Third AI Force

While Musk has reiterated concerns about the technology’s long-term impact, especially that it can outdo human intelligence, the threat posed by tech giants is a big concern. Likewise, the serial entrepreneur has already created a new company X.AI that he says will focus purely on AI innovation while rivalling the tech giants.

Twitter, one of his biggest assets acquired for $44 billion last year, is expected to be part of the X.AI artificial intelligence push. Tesla, another company that is part of Musk’s portfolio, is already leveraging advanced technology to enhance its self-driving technology. While Musk has had a long history of trying to steer the AI revolution, he has recently needed to catch up with Google and Microsoft calling the shorts.

Microsoft has already invested nearly $10 billion in OpenAI, the parent company behind the AI-powered tool ChatGPT. Moreover, the software giant has already gone to the extent of integrating ChatGPT into its search engine Bing in the race to try and trim Google’s dominance in the search business.

Similarly, Alphabet’s Google is investing big in the revolutionary technology, having already unveiled Bard, its answer to ChatGPT, as it also looks to spearhead the AI race. Amazon is another tech giant that is betting big on Artificial Intelligence as it looks to leverage the technology to enhance its supply and logistics network.

 The tech billionaire has been the most aggressive on growing concerns that the technology could be misused. Consequently, he has been calling for more regulation. There are growing concerns that if unregulated, the technology could have serious ramifications, on ending up in the wrong hands. The threat of technology being used to propagate misinformation and fake news is one of the biggest threats.

Twitter Profitability

In addition, Musk has confirmed that Twitter will become profitable in the next few months. The company has been losing funds since 2019, which forced Musk to embark on an aggressive restructuring drive after completing its acquisition last year. After turning around the social network’s fortunes through massive job cuts, among other efforts, Musk is poised to step down from his post as the CEO.

Musk has already settled on Linda Yaccarino, an advertising guru, as the next Twitter’s CEO. While he is expected to remain the executive chairman, he will not be involved in the day to day running of the social network which should see him spending more time at Tesla and SpaceX.

Musk’s involvement with Twitter has not gone well with Tesla investors, most of whom raised concerns that it was distracting him. By hiring a new CEO, he is now expected to focus on the electric vehicle giant facing its fair share of challenges. The company has had to implement big price cuts in a bid to fuel EV demand.

US Stock Market One Sided with Longs Outnumbering Shorts 9 to 1

Investors are unfazed by the long debt ceiling stand-off in Washington or the impact of high-interest rates on the Federal Reserve pushing the benchmark rate above the 5% level. Over the past weeks, investors have added $21 billion worth of new long positions on the S&P 500 futures, affirming how bullish the market remains.

US Stocks, Longs vs Shorts

The weekly flow of net longs affirms the one-sided play, with investors staying clear of short positions despite fundamentals and technicals painting a different picture. Longs already outnumber shorts by more than 9 to 1, according to market strategists from Citi. Moreover, investors short the market are accruing losses at an alarming rate owing to the strong buying pressure.

Retail investors are not the only ones going along the market. According to Goldman Sachs prime brokerage unit, Hedge funds have been making big bullish bets, thus helping steer the market higher. Over the past two weeks, purchases have been the fastest since October of last year.

Market Strategists from JPMorgan and Morgan Stanley have been warning that the market remains overstretched after the recent rally. However, investors have been shunning the calls opting to go long in anticipation of another bull run.

The S&P 500, which was under immense pressure last year, is already up by more than 9% and on the cusp of finding support above the crucial 4,200 level. Given the increasing bullish bets, the likelihood of the index powering above 4,300, as most analysts had projected, is high. Tech-heavy NASDAQ has been one of the best-performing indexes gaining more than 26% year to date.

The impressive run comes at the backdrop of investors going long on most tech plays with exposure to artificial intelligence technology. Additionally, the strong rally has come on investors shifting towards companies with strong earnings potential and away from cyclical. In addition, hedge funds have been adding long positions on US mega-cap tech shares.

Stock Market Catalysts 

The impressive run in the US stock market comes at the back of a strong earning season that saw most companies’ top estimates and provide a solid outlook. The earnings reports helped shrug off concerns about the potential impact of the US economy plunging into recession. Bets of a potential rate hike pause by the Federal Reserve have also helped fuel positive sentiments in the market.

Consequently, volatility levels have plunged to the calmest levels in over a year, helping strengthen investors’ sentiments. Low volatility has also helped shrug off the potential risks posed by the ongoing negotiations on the US debt ceiling that looks set to drag to the last minute.

However, warning bells following the recent rallies are becoming increasingly louder. Strategists from UBS Global Wealth Management have warned that the market is only pricing good news and shunning bad news, which is bad. Amid the micro uncertainty, the strategists have warned that the recent rally looks worrying.

The upward momentum has already started showing signs of weakness with technicals such as the relative strength index shouting sell. Demand for risk should increase significantly if the US stock market is to hit new levels from current levels.

Morgan Stanley Analyst Warns of US Stock Market Rally 

Bearish voices amid a bullish market are growing by the day on Wall Street. The latest to join the fray is Morgan Stanley’s Michael Wilson, who has warned investors of getting carried away by the recent rally in the U.S. market. According to the analyst, ranked number 1 last year for correctly predicting a slump in stocks last year, investors should be wary of potential pullbacks after recent rallies.

Deteriorating Fundamentals

Wilson maintains there are many reasons to be bearish about U.S. stock’s long-term outlook. For starters, fundamentals and technicals already point to market problems. Moreover, the sentiment does not come as a surprise going by the high-interest rate environment. The U.S. Federal Reserve pushing the benchmark rate above the 5% level has triggered a significant increase in borrowing costs. Consequently, most businesses and companies are unable to access the cheap capital needed to finance expansion operations.

Similarly, the high-interest rate environment amid high inflation poses the risk of affecting consumer’s purchasing power. The result could be a significant decline in the goods and services that customers can buy. Most immortally, the prospect of the U.S. economy plunging into recession amid the high-interest rate environment is higher than ever.

Technicals are also pointing to an overstretched market after recent rallies.  The S&P 500 is already up by more than 9% amid deteriorating economic conditions in the U.S. Tech-heavy NASDAQ index is also up by more than 25% for the year amid the high-interest rate environment that continues to pose significant pressure to tech companies.

According to Morgan Stanley analysts’ lofty valuations pose a significant risk to investors intending to join the current bull run, especially on a potential correction. Likewise, he has warned that only a narrow breadth of stocks is driving the overall rally in the market. For instance, tech stocks have been on a roll amid increased focus and interest in stocks with exposure to artificial intelligence technology.

US Stock Market Outlook

Wilson has also warned that a resolution of the ongoing debt ceiling negotiations is unlikely to have a positive impact on stocks’ long-term outlook. The analyst expects any resolution to drive stocks higher in the short term, with any rally viewed as a false breakout or bull trap.

Morgan Stanley is not the first one or the only one to raise warning bells about the recent rally in the U.S. stock market. JPMorgan strategist Dubravko Lakos Bujas is also warning of potential market volatility as talks in Washington drag on.

Nevertheless, there are other strategists confident about the current bull run. For example, Bank of America’s Savita Subramanian remains bullish about the stock market outlook, sticking to a one year target of 4,300 for the S&P 500.

How stocks fare from current levels is highly dependent on various factors. For starters, any suggestion that the FED would hike interest rates further to try and bring inflation below the 2% threshold would be catastrophic.  The market has already priced in the FED, cutting interest at the end of the year.  Likewise, the lawmaker’s failure to reach an agreement on the debt ceiling could trigger another wave of uncertainty as the U.S. would end up defaulting on its financial obligations.

BOfA Strategist Warn of Tech Stock Bubble Amid AI Focus

Technology stocks have been on an impressive run, posting significant gains on the back of solid earnings reports. Likewise, increased focus and interest in plays with exposure to artificial intelligence have also helped fuel the impressive run. Tech-heavy NASDAQ index is already up by more than 25% for the year signaling investors’ confidence in tech plays. Amid the impressive gains of Bank of America, Strategist Michael Hartnett believes a bubble is slowly brewing in the tech sector.

FED Monetary Policy Uncertainty

Hartnett, who is accredited to predict a U.S. recession, recommends that investors sell the S&P 500 as stocks are poised for a major pullback from current highs. In his research note to investors, the strategist maintains the U.S. Federal Reserve is far from completing its monetary policy tightening and could hike interest rates.

The sentiments come as a surprise given that the market has already priced in the FED, reaching its peak on interest rate hikes. However, with inflation levels pulling back from four-decade highs of 9.1% to about 4.8%, many analysts believe the FED will not hike further but instead focus on rate cuts at year-end.

However, Hartnett maintains a different view insisting that if the FED is indeed pausing rate hikes and potentially moving to rate cuts, then bond yields should be rising above the 4% threshold. That has not been the case, with the 10-year yield struggling to rise above the 3.7% level. The yield has only surged in recent days amid the ongoing debt ceiling debacle in the U.S.

Tech Stocks Bubble

Confident that the FED has not yet reached the end of its monetary policy tightening, Hartnett believes tech stocks face an uncertain future. The stocks are the most susceptible to interest rate hikes as such actions trigger significant increases in borrowing costs, making it hard for the companies to access cheap capital needed to support and fuel research and development activities.

Additionally, Hartnett maintains that the recent explosive run among tech plays fueled by the A.I. race has only led to a “baby bubble”. According to the analyst, bubbles always start with easy money, eventually ending with interest rate hikes as the FED swings into action. At the height of the internet stocks rally in 1999, complimented by solid economic data, the FED resorted to monetary policy tightening, a move that only led to the bursting of the tech table nine months later.

The FED hiking the funds rate to 6% in the race to try and bring the inflation level to 2% could be catastrophic. In recent weeks the markets have been pricing a potential interest cut before the end of the year as one of the ways of averting the U.S. economy plunging into recession. The markets expect interest rates to drop to 3% to cushion the fragile economy.

Amid the concerns raised by the BOfA strategist and uncertainties about interest rate hikes, stocks continue to edge higher. The recent rally has been fueled by growing optimism that lawmakers are closer to a deal that will result in the raising of the debt ceiling.

Tech heavy index Nasdaq has already surged to its highest level in over a year, signaling growing bullishness on tech play. In contrast, financials remain under pressure; sentiments weighed heavily by the banking crisis. As a result, the sector has registered a third week of outflows.

Debt Ceiling Chaos 2023: We’ve Been Here Before

With June 1 just around the corner, we’re still nowhere near a resolution.

And while it’ll more than likely come down to the 11th hour, the chaos and panic it could produce could drive volatility through the roof.  

“Rich and poor nations alike fear a possible U.S. default, which would torpedo the financial markets and deal a massive blow to the dollar. Analysts say the impasse jeopardizes America’s standing abroad. And foreign economists and policymakers are bewildered over why the United States has imposed a specific limit on its debt and then turned it into a political football,” says The Washington Post.

Unfortunately, we’ve been here before.

In 2011, we came close to defaulting under President Obama, which was averted in the final days. Unfortunately, as we waited for that to happen, the Dow lost 2,000 points. Then, in 2013, during another chaotic disagreement over the debt ceiling, Obama said:

“A decision to actually go through with it, to actually permit default – according to many CEOs and economists – would be, and I’m quoting here, ‘Insane, catastrophic, chaos.’ These are some of the more-polite words,” he said. “Warren Buffet likened default to a nuclear bomb, a weapon too horrible to use.”

These days, Treasury Secretary Janet Yellen says a potential default would be destructive. In fact, she says, “A default would threaten the gains that we’ve worked so hard to make over the past few years in our pandemic recovery. And it would spark a global downturn that would set us back much further. It would also risk undermining US global economic leadership and raise questions about our ability to defend our national security interests,” as quoted by CNN.

Do we believe the U.S. will default on its debt by June?

No, not really.  We can’t afford to allow it to happen.  And if politicians allow it to happen, they may want to start looking for work elsewhere.

Still, the fear of default will drive markets batty until the 11th hour.

As we’ve noted a few times, even the fear of default can lead to explosive volatility. And along with that, we could see related ETFs and ETNs rocket higher, including:

The ProShares Ultra VIX Short-Term Futures ETF (UVXY) — The ETF was designed to match two times (2x) the daily performance of the S&P 500 VIX Short-Term Futures Index.  

iPath S&P 500 VIX Short-Term Futures (VXX) — The VXX ETN provides exposure to the S&P 500 VIX Short-Term Futures Index. 

ProShares VIX Short-Term Futures ETF (VIXY) — ProShares VIX Short-Term Futures ETF provides long exposure to the S&P 500 VIX Short-Term Futures Index, which measures the returns of a portfolio of monthly VIX futures contracts with a weighted average of one month to expiration. 

Investors Warned of Impact of Raising US Debt Ceiling

Will lawmakers reach an agreement to raise the debt ceiling and avert a potential historic default? That’s the million-dollar question as negotiations between Congress and President Joe Biden’s administration drag to the wire. But unfortunately, while expectations are high that a deal will be struck to resolve the impasse, the market is yet to factor in the impact of any agreement.

Building Treasury Account

The economy is not expected to come out unscathed with any agreement as the negotiations drag. For starters, it will take some time before businesses return to normal operating conditions, especially on the borrowing front. As a result, risk managers are already calling investors, businesses and the corporate world to start hedging the aftermath of any Washington resolution.

One of the biggest risks at stake with the Treasury looking to reach an agreement to lift the debt ceiling is that it will have to try to replenish its dwindling cash reserves that have dropped to about $95 billion. It’s the only way the department will be able to meet its growing financial obligations.

Consequently, the department will have to enter the market and engage in Treasury bill sales of well over $1 trillion to help bolster the cash reserves. The sales are expected to result in a significant drain of liquidity in the banking sector, something that could have serious ramifications amid the fragile economy fueled by the banking crisis.

Once the debt ceiling impasse is settled, the treasury account is expected to surge to $550 billion on aggressive Treasury bill sales by the end of June. It should increase by a further $600 billion three months later.

Growing Treasury Account Impact

Whenever the Treasury Department sells a significant amount of bills over a short period, its accounts swell. In return, it results in cash being pulled out of the private sector, which affects liquidity in the overall market. Consequently, analysts and economists are already warning of the potential risks posed by the Treasury accounts increasing significantly over a short period.

The race to replenish cash reserves should also result in a significant increase in short-term funding rates. A significant increase could be detrimental as it would come at a time when the benchmark rate has increased at the fastest pace in decades in the race to try and stem runaway inflation. Moreover, any further increase in interest rates could take a toll on a US economy facing slow growth.

Bank of America analysts are already signaling that an increase in short-term funding rates will have the same impact as a quarter-point interest rate hike by the Fed. Consequently, while the market has already priced in the fact that the Fed has reached the end of its monetary policy tightening, the impact of treasury bill sales is yet to be factored in.

Higher borrowing costs are the last thing the US economy needs amid slowing growth in various sectors. The increase would significantly affect companies and businesses’ ability to access cheap capital needed to fuel and accelerate economic activities.

Another piece of the puzzle that investors have to factor in with raising the debt ceiling is the Fed’s Reverse Repurchase Agreement RRP. The facility currently has over $2 trillion as money market funds continue to store funds to take advantage of the overnight rate of just over 5%. Consequently, an increase in the Treasury account without a significant drop in the RRP should result in a significant drain of bank reserves that should affect liquidity in the market further.

Google to Accelerate Drug Development with AI Tools

Google is ready to address the lengthy and costly process of bringing new medicines to market. The tech giant has unveiled two new suites of artificial intelligence-powered tools that it says will help biotech and pharmaceutical companies accelerate the discovery of new drugs. Target and Lead Identification is one of the suites that adds to Multiomics Suite, affirming the tech giant means business in the generative AI arms race.

AI Tools For Drugs Generation

Target and Lead Identification Suite is an AI-powered tool that Google says will help researchers in the drug development business better understand the structure of proteins crucial to the development of drugs. On the other hand, Multiomics Suite is to help researchers store, analyze and share huge troves of genomic data.

The two suites are already available at a cost depending on the company using them. There is already an indication that big pharma led by Pfizer Cerevel Therapeutics and Colossal Biosciences have been using the two tools in their drug development processes.

The new AI tools, if effective in accelerating the development of medicines, should boost the drug development business, which costs companies millions and sometimes billions of dollars. According to Google’s Cloud globe director of life science strategy Shweta Maniar, the two new suites will save companies a lot of time and money in the drug development process.

However, much focus is on whether the tools will help enhance the development of drugs that achieve regulatory approval. Only 16% of drugs that reach clinical trials ever gain the much-coveted regulatory approval.

Tech Giants AI Rush

With the new AI-powered tools, Alphabet, Google’s parent company, has answered critics who taunted the company for lagging behind in the AI race. Microsoft investing billions of dollars in OpenAI and gaining access to ChatGPT rattled the markets. Initially, there were fears that Microsoft integrating the AI-powered Chatbot in its search engine would be the much-needed trick to rattle Google’s dominance of the search business.

Fast forward, Google has already unveiled its own AI-powered tool Bard which has helped affirm it means business in the generative AI race.   Extending AI capabilities into the drug development business all but sets the tech giant on another level amid the stiff competition around revolutionary technology.

Nevertheless, Google and Microsoft are not the only ones at the forefront of integrating artificial intelligence technology to enhance various operations. Amazon has also been busy on the AI front, signaling it plans to use the technology to speed up deliveries.

The e-commerce giant intends to use the technology to enhance the placement and storage of items in storage facilities. The company has been shipping items to customers from various countries for the longest time.

With AI technology which can sieve and analyze troves of data involving shopping patterns, Amazon should optimize product placement in facilities close to customers. By predicting which products will be in demand and where the company should be able to store them in facilities close to customers, therefore, enhancing same-day and next-day delivery.

Amazon Turns to Artificial Intelligence to Enhance Product Deliveries 

Amazon sees artificial intelligence as the technology that will help enhance its delivery business. The e-commerce giant has started using the technology to strengthen its logistics operations as it looks to minimize the distance between its products and customers.

AI in Deliveries

The revolutionary technology is to be used in transportation to help in mapping and planning delivery routes. The technology is to take into account variables like weather and traffic to help outline the ideal route that ensures goods are delivered in the least amount of time to enhance the same-day and next-day delivery.

Amazon is also leveraging artificial intelligence to enhance where to store its inventory. The e-commerce giant has been shipping items to customers from other countries for the longest time. It plans to do away with the regionalization model by using AI to enhance inventory storage. The company has already made significant progress on this front, with more than 74% of products delivered from fulfilment centers within the customer’s region.

Artificial Intelligence is the only technology capable of analyzing troves of data and patterns to predict which products will be in demand in different markets. Proper inventory placement should allow the company to cut back on delivery costs while enhancing the time it takes for products to reach the final destination.

In addition to enhancing logistics, artificial intelligence is to be used to help customers while searching for products on the platform. The technology is to help them find their rights as quickly as possible. The integration follows similar moves by Microsoft, which have already integrated AI-powered chatbot ChatGPT into its search engine Binge to enhance people’s search operations. Artificial intelligence technology should help Amazon enhance its data as the next delivery service as part of the Prime subscription service.

AI Effects on Jobs

The increased use of advanced technologies, while a good thing in enhancing supply and logistics, it also threatens to disrupt the labor market. Given the efficiencies they offer, more jobs that humans were initially doing are increasingly being allocated to AI-powered machines. A report by Goldman Sachs has already indicated that automation due to artificial intelligence could affect more than 300 million jobs in future.

Tech giants have continuously downplayed the effects that automation could pose, insisting they will play a collaborative role in helping support humans in the workplace. But, according to Amazon’s vice president of customer fulfilment and global op services, Stefan Pedego, automation will only cause a transformation in the type of jobs that humans do.

Consequently, he expects automation to only change job specifications rather than eliminate job positions. The tech giant is already using the technology in its fulfilment centers on repetitive tasks such as the lifting of heavy packages.

The Amazon executive expects humans to continue doing jobs that require cognitive abilities. Nothing could be further from the truth as tech giants have continued to downsize, laying off thousands of people amid the race to trim operational expenditures. In addition, the likes of Amazon, Facebook and Twitter have all laid off thousands of staff with the automation of many operations amid increased AI-powered chatbot use.