The Chief Executive Officer of Norway’s $2.2 trillion sovereign wealth fund has implored companies to embrace artificial intelligence (AI) in a manner that serves the greater good of society, warning against the predominant inclination to utilize the technology for workforce reduction.
In an interview with Reuters on Tuesday, Nicolai Tangen cautioned that job losses associated with AI implementation could incite public outrage, especially as automation tools become increasingly ubiquitous across the global business landscape.
This fund, which strategically invests the nation’s oil and gas revenues, stands as the largest sovereign wealth fund in the world, holding interests in approximately 7,200 companies and averaging a 1.5% ownership stake in all publicly traded stocks globally.
Emphasizing productivity over mere cost-efficiency
Tangen articulated his apprehension regarding businesses that prioritize short-term cost reductions at the expense of sustainable productivity improvements.
“I find it astonishing that some individuals utilize AI solely to slash expenses,” he remarked during his interview at the fund’s Oslo headquarters.
He further noted, “People are not naive. They do not wish to render themselves unemployed, which diminishes the motivation to adopt these technologies.”
He underscored the notion that AI’s potential should be harnessed to enhance economic performance and operational efficiency rather than simply eliminate job opportunities.
These remarks arrive concurrently with announcements from several major U.S. corporations planning layoffs while reengineering operations in light of augmented AI utilization.
This has amplified apprehensions among policymakers regarding prospective job displacements and wider economic ramifications.
Fostering broader acceptance without adverse repercussions
Tangen, who has previously championed the integration of AI within his own organization, reaffirmed that his fund has no intentions of instituting layoffs.
Approximately half of the fund’s 700 personnel are actively engaged in the development of proprietary AI tools.
He contended that businesses should redirect their focus towards leveraging AI for expanding market opportunities.
Instead of just cost-cutting, why not utilize it to enhance productivity and capture greater market share?
This approach will facilitate swifter and more seamless adoption, benefitting society by circumventing a backlash against what is fundamentally a positive advancement, he articulated, as detailed in the Reuters report.
Challenges of Europe in tech advancement
Tangen also drew attention to Europe’s struggle to compete with dominant American technology corporations.
Nevertheless, he acknowledged Europe’s robust fundamentals, which include a highly educated workforce, advanced digital infrastructure, and access to extensive datasets.
Over time, the fund’s exposure to European markets has diminished, with regional investments plummeting from 39% a decade ago to 24.8%, indicative of slower growth vis-à-vis American technology enterprises.
Call for comprehensive reform and diversification
Earlier in the year, the fund advocated for the unification of Europe’s capital markets and the promotion of innovation and competition.
Simultaneously, certain Norwegian lawmakers have voiced concerns over the fund’s substantial exposure to the U.S., which constitutes over half of its investment portfolio.
Tangen expressed his support for a broader array of global service providers, highlighting the scarcity of alternatives to American firms.
At present, the fund depends on Amazon’s AWS for cloud computing solutions and Citibank for its global custodianship.
Source link: Invezz.com.
