Impact of AI on World Economy in Times of Coronavirus

Businesses around the world are looking for innovation with the rising competition. To thrive in such an environment businesses are looking for technological solutions that can help them overcome challenges and constantly help in building new strategies. In recent years, artificial intelligence and machine learning technologies have been receiving a fair amount of attention from the business. One of the earliest forms of AI used for business applications are chatbots.

In the year 2018, only the world’s bigger economies reported their own AI initiatives. In the same year, McKinsey reported that, AI can add around 16% or US$13 trillion to worldwide economic output by the year 2030. Its report depends on simulation models of countries, sectors, businesses, and worker levels. According to a recent AI prediction report by PwC, 90% of executives believe that it is opening more opportunities for business than risks.

Today, the ongoing problem of COVID-19 has put the economy at a halt. Lockdown across several nations is disrupting economies without any clear vision of the future. The US which is a hub of startups and corporate innovation for over a decade is experiencing economic winter. The markets in the country are falling due to coronavirus threats. Large scale companies in sectors such as automotive, technology, and others are announcing substantial layoffs. Europe is also experiencing a similar kind of problem.

Many companies and their consultants are indicating that decline of the market due to the virus; companies will be focusing more on reducing capital expenses and restructurings than expansion. Economists are predicting the odd of recession to 50% or above in 2020. Companies are gearing up to respond to dark economic clouds.

According to the UN, the lockdown is leading economies towards digitalization but many AI-based startups are cutting staff. This sector before the outbreak was forecasted to be most optimistic in terms of jobs and spending. Fortunately, some AI-based startups are reporting increased funding due to the innovations they are offering to battle the virus.

AI is being embraced by many businesses, people, and government organizations as it is proving to be effective for growth only in parts of the economy. This will lead to investment from a couple of nations with AI-oriented ability and state resources. These resources will be directed towards AI to help to achieve supremacy; however, there will also face some repercussions.

Initially, there were many optimistic forecasts about the impact of AI on the economy but uncertain time has increased prominence of some of the technologies. These few companies are experiencing unprecedented expansion due to active participation in the fight against viruses while others remain in the dark. Some of the most promising AI-based companies are experiencing decreased funding. So while it is very hard to provide any clear vision as to where can we see AI it is very important for us to consider the possibility of its slowing impact on the economy.