The AI future

“ARTIFICIAL Intelligence (AI) primed to expand in 2026”, says the news ticker of a foreign news channel crawling across the television screen of the newsroom.

A tech analyst was giving his view of what AI has to offer besides headline-popping figures on investments the past two years that have not really translated to sizeable gains in earnings for businesses.

It is estimated that the big tech firms have spent well over US$400bil this year and are projected to spend over US$500bil next year.

This past April, McKinsey & Co issued a report estimating that AI’s need for computing power will fuel a data centre building frenzy globally of US$6.7 trillion by 2030.

That is a lot of money, and there is no way of knowing whether it is money well spent as AI is still in the early stages of deployment.

US stocks are still being fuelled by AI-related themes despite scepticism revolving around the “circularity deals” among companies in the industry value chain that have led to speculation of an impending AI bubble.

By all accounts, the promise of AI will continue to fuel the stock rally and create new wealth, but at some point, investors will have to brace for a market correction.

According to The Motley Fool’s 2026 AI Investor Outlook Report, some 93% of retail investors plan on riding out the short-term volatility and hold on to their AI stocks for the long-term growth prospects.

Tech impact on people

The technology’s impact on the financial markets is but one part of the equation.

We should be more concerned about its impact on people because AI does have socio-economic impacts that can lead to socio-political consequences due to how pervasive the technology is becoming.

While the verdict is still out on the impact of AI on employment and skills, it is understood that the technology will have far-reaching implications.

AI’s trajectory in 2026 will be characterised by a faster pace in broader adoption compared to the last year or two when the technology began to be integrated into work processes.

Businesses and governments will be watching as well as making their assessments of AI’s effectiveness.

When there is technological disruption, there will be redundancies in the workforce, even in jobs requiring specialist skillsets.

In the earliest days of the technology’s adoption, AI-powered automation began to take over the repetitive work processes that employers were already finding difficulty to staff with flesh-and-blood workers for years.

The work had low value-added and generally low paying. Now, even so-called white-collar workers are in danger of being culled.

Last October, Amazon laid off 14,000 people in corporate roles and potentially up to 30,000, with its chief executive officer Andy Jassy specifically citing AI adoption leading to leaner operations and the need to reallocate resources for more AI investments.

Still, there are those who argue that AI’s role in dampening the pace of job growth, especially in developed economies, is overstated.

They cite data that job positions most exposed to AI are the ones where there is demand for talent and where wages are high.

These are the ones who believe that workplace productivity is being enhanced and workers can now move on to higher value-added tasks, either because the technology have saved them time to focus on these tasks or because these workers can now be reskilled or upskilled.

The firm as a whole benefits, as it can then produce goods or offer services with higher value-added.

This is the virtuous cycle that tech evangelists like to preach.

There are risks to this view.

Today’s workers may not be agile enough to confront the AI challenge, hence the reason for all the layoffs in the most advanced global technology firms.

There are also not enough positions available even if there is a need for a human interface to make the complex or nuanced decisions that AI cannot make.

For example, try explaining a complicated financial transaction gone wrong in the live chat box powered by AI bots that most banks now have.

People will say it is an exercise in patience when the AI bot tells them that it does not understand the request and that it is still learning. Then why bother deploying the bot at all if it’s useless?

Volatile economic conditions

The entry level jobs are disappearing, and this can arguably be blamed on the more volatile global economic conditions stemming from trade uncertainties, but it can just as easily be blamed on AI.

Research has shown that there certainly is a reduction in hiring, besides the high-profile news of AI-related layoffs by companies like Meta or Microsoft.

AI deployment means less need for those just getting into the workforce, which can be wrenching at a personal level and highly disruptive at the society level when there are masses of unemployed young people.

This is why South Korea is going to implement an AI law that will take effect from Jan 22, although there will be a regulatory grace period of at least one year.

South Korea will be the first country to implement an AI law, ahead of the European Union, which plans to enforce most high-risk AI regulations starting in August 2026.

Among the areas that South Korea is safeguarding are defining AI systems that could affect human life, safety and basic rights.

A sensible guardrail at a time when there is a need for some certainty as big corporations take advantage of the technology for productivity and efficiency purposes.

AI should shape itself around humans and not the other way.

If it is going to be pervasive and can quickly learn through the large language models that are now being spoken of, then we certainly need a framework in which AI and the big corporations behind the technology, can operate without holding back innovation.