Erik Brynjolfsson: The true value in AI is much more than replacing jobs. (Photo by Roy Rochlin/Getty Images for Unfinished Live )

Getty Images for Unfinished Live

At the end of March, Oracle laid off 30,000 employees, claiming that its use of artificial intelligence can pick up the slack. Other companies have made the same claims to justify cutting. But how far can a company cut before it loses its competitive advantage?

One highly regarded AI thought leader, Erik Brynjolfsson pushes back against the notion that AI can take over the reins of organizations in any significant way. Humans will always be needed to drive organizations forward, said the Stanford University professor, author, and inventor.

I recently had the opportunity to sit down with Brynjolfsson, who emphasized that AI is a tool – emphasis on tool – that can significantly boost human skills, rather than replace them.

When it comes to AI, “humans are the enablers,” he said. “Most problems can be broken into three parts: defining or framing the question; executing it; and evaluating. For most of history, humans did all three of those parts. Now AI agents, and AI more broadly has been very good at doing that middle part.”

But humans, he continued, “have an even bigger role in defining the right questions, and evaluating them.” By moving through the first stage of problem-solving, and defining the question, one can hand it over to AI agents for the execution stage and potentially boost productivity by a factor of ten, he estimated. The evaluation of the results then goes back to human control for the third stage of the process.

What AI brings is a vast boost in human productivity, he emphasized. “If you lean in and embrace the technology, you can be one of the people that learn to be more productive, and helps create a lot of value for the world and for yourselves.”

Immense value can be seen among those who leverage AI resources and capabilities to create new types of businesses. Witness some “AI entrepreneurs literally creating one-person unicorns – Silicon Valley jargon for a billion-dollar business. That’s very rare still, but beginning to happen,” he explained.

There’s even greater opportunity inside of companies among ‘intrapreneurs’ who are leveraging the amplifying power of AI. “Things like coding and other specialized skills were the domain of a small subset of people in the company,” he said. "Now with ordinary English you can unleash agents to do all sorts of work. Joe in accounting or Susan in the marketing department, who never did a lot of coding, can start using these tools to create a lot of value for their company – and rise through the ranks faster.”

To assist both technical and non-technical people in understanding the implications of AI, Brynjolfsson has launched two sessions on MasterClass, "The New Rules of Wealth" and "Revolutionize Your Workflows With AI."

He also pushes back on talk of a so-called white-collar job apocalypse. “Technology has always been destroying jobs. It has always been creating jobs,” he said. “I think its legitimate to be concerned about that transition. This time it’s happening faster, and at a greater scale and a greater speed than ever before.”

However, he continued, “the answer isn’t to huddle back and try to hang on to what you already have. The answer is actually to lean in and the people who do that are going to come up ahead.”

Historically, he continued, “the people who lean into change have been the ones who have been successful. This is even more true than in the past.”

Consider the new managerial roles emerging for people. “Humans will be the chief executives of a fleet of agents,” he explained. “Their job will be to increasingly define the questions, and they have a fleet of agents working for them. We’ll all be in charge of these fleets of agents and the people who do it first are going to be massively empowered.”

In terms of the benefits potentially being delivered by AI, Brynjolfsson called out the business leaders who simply see AI as a tool for reducing headcount and cost cutting. “There’s nothing wrong with being more efficient,” he advised. “But that’s usually the least important way to get benefit from AI. More often, the way you boost productivity come from boosting that topline, boosting the output, not simply reducing the input.”

Cutting costs and jobs is “frankly lazy,” he said. “It’s a lazy quick way. It’s not a sustainable thing to do. Not only that, it turns off your workforce. Whose going to want to lean in and embrace something that’s designed to replace their own jobs?”

Boosting productivity and value means “introducing new products, new features, new ways of having customer service, and customer satisfaction. And those are often harder to measure than just headcount reduction. They’re ultimately much more lasting sources of value. If you want to build lasting competitive advantage, take the time to think harder about how you measure those often-intangible benefits to the customer to innovation and increasing revenues to the topline."

It’s a win-win-win situation, he added. “A win for the stockholders, win for the customer, win for the employees, by leaning in creating more value rather than simply cutting costs.”

Thanks to AI, “we have a ton of agency, we have more power to change the world, change our own lives, than we did before,” he said. “Because we have more powerful tools. I want to push against this idea that the tools are going to come in and do stuff to us. That’s not how tools work. We are the ones who wield more powerful tools, because it means we have more capabilities.”