Liberty Street Economics, Federal Reserve Bank of New York: “The swift advancement of artificial intelligence (AI) has sparked significant concern that this new technology will replace jobs and stifle hiring. To explore the effects of AI on employment, our August regional business surveys asked firms about their adoption of AI and if they had made any corresponding adjustments to their workforces. Businesses reported a notable increase in AI use over the past year, yet very few firms reported AI-induced layoffs. Indeed, for those already employed, our results indicate AI is more likely to result in retraining than job loss, similar to our findings from last year. That said, AI is influencing recruiting, with some firms scaling back hiring due to AI and some firms adding workers proficient in its use. Looking ahead, however, layoffs and reductions in hiring plans due to AI use are expected to increase, especially for workers with a college degree. More Businesses Are Using AI – Our August business surveys asked firms in the New York–Northern New Jersey region whether they used AI as part of their business process in the past six months and whether they planned to use AI over the next six months. This included searching for information, marketing, business analytics, data management, and customer service, among other uses. Firms using AI exclusively as an information search tool but nothing else were not counted as AI users. As shown in the chart below, 40 percent of service firms reported using AI this year, up from 25 percent this time last year, and 44 percent expect to use AI over the next six months. Among manufacturers, there was a similarly sized jump in use, from 16 percent last year to 26 percent this year, with roughly a third expecting to use AI over the next six months.  These shares are toward the high end of the range of existing studies of AI uptake in the workplace…”