AI Is Reshaping Jobs. Here Are the Companies to Watch.

Companies whose labor costs are more complementary to generative AI will see higher cash flows because of the technological improvements complementary to their workforce.

International Business Machines Corp. (ticker: IBM) tops the researchers’ list of the 15 largest companies with the highest exposure to ChatGPT, the chatbot AI released in November by the research laboratory OpenAI.

The next four are

Intuit
,

Qualcomm
,
Fiserv, and

Nvidia
.

IBM CEO Arvind Krishna acknowledges a big exposure, telling Bloomberg News this month that of the company’s non-customer-facing 26,000 employees, “I could easily see 30% of that getting replaced by AI and automation over a five-year period.”

Microsoft (MSFT), is ninth on the list of most exposed. CEO Satya Nadella is freezing the salaries of its full-time employees this year, citing the need to invest in a “major platform shift in this new era of AI,” according to a memo published by Business Insider.

Of the 15 largest U.S. companies with the highest exposure to AI, based on ChatGPT’s assessment of tasks performed in various occupations, eight are in the information sector, and six are manufacturing companies. S&P Global,

Broadcom
,

Verizon Communications
,
and 3M round out the top 10.

Of the 15 least exposed companies, two are in the food services sector, seven in the retail trade sector, three in transportation and warehousing, and two in manufacturing.

Starbucks
,
McDonald’s,

Dollar General
,
Target, and

Walmart

are the top five in the least-exposed group.

“Our premise is that tasks performed by the labor forces of more exposed firms can more easily be performed by generative AI applications relative to the tasks executed by the workforces of less-exposed firms (and industries),” wrote three finance professors in the research report, which was published last week.

“At the firm level, whether AI is positive or negative for value hinges on how exposed their labor forces are, and how able incumbent firms vs. new entrants are able to take advantage of the technological improvements,” Andrea L. Eisfeldt, the finance chair and professor of finance at the U.C.L.A. Anderson School of Management, told Barron’s.

Some of the findings contrasted with prior research and assumptions about AI and labor: the study found that the most affected occupations are actually those with a high share of non-routine cognitive analytical tasks or routine cognitive tasks, while manual physical tasks are relatively unaffected.

IBM told Barron’s that it is actively hiring for thousands of positions. “IBM is being deliberate and thoughtful in our hiring with a focus on revenue-generating roles, and we’re being very selective when filling jobs that don’t directly touch our clients or technology.”

Intuit (INTU), NVIDIA (NVDA), and Microsoft declined to comment on the study. Starbucks (SBUX), McDonald’s (MCD), and Dollar General (DG) could not immediately be reached for comment.

In addition to Eisfeldt, the study was conducted by Gregor Schubert, assistant professor of finance at the Anderson School; and Miao Ben Zhang, an assistant professor of finance and business economies at the U.S.C. Marshall School of Business.

“While we do not take a stand on whether generative AI is a substitute for, or complementary to, labor with higher exposures, our work shows that firms that have a higher share of occupations exposed to generative AI experience gains in value across a wide variety of industries,” they wrote.

This new research suggests that AI is good for companies with more exposure. But whether or not it’s good for workers, that is, whether or not it can actually replace labor in these industries, remains to be seen. 

When asked what employees of companies like IBM should take away from the study, Eisfeldt said that AI could help make workers more productive. “Although these firms may be restructuring their labor force, the ultimate impact on labor overall can still be positive,” she told Barron’s.

“For many jobs, AI tools can take over rote or repetitive tasks, allowing employees to focus their efforts on areas where human creativity and insight are particularly valuable. As a result, some jobs may become both more engaging for the worker and more valuable to the firm, as long as workers are willing to adapt to the change in responsibilities,” she said.

Corrections & Amplifications

IBM’s CEO estimated that 30% of the company’s 26,000 non-customer-facing employees could be replaced by AI over five years. A previous version of this article incorrectly gave the figure as 260,000 and didn’t specify that the 30% referred to workers who don’t interact with customers.

Write to Janet H. Cho at [email protected] and to Stevie Rosignol-Cortez at [email protected]