AI is Taking Wall Street Jobs

There’s so much going on in the world right now that it’s difficult to stay focused on any one thing for very long. I think Hot Air readers probably know that better than most people.

And yet, not everything that grabs our attention for a day or a week is going to really matter six-months or a year from now. And some things that are sort of simmering on the back-burner may turn out to be a lot more important that we anticipate.

I sort of think the development of AI could be the thing that seems the most important of all in another 5-10 years. We’re all watching it develop in real time and the closer you’re watching the easier it is to see this as gradual change when it’s actually happening really, really fast. Chat GPT is just over 3 years old. Anthropic’s Claude is 3 years old. Google’s Gemini is also 3 and Grok is almost 2 1/2.

Despite how recent they are, there are signs that they are quickly changing the world and already putting some people out of work.

Less than four months ago, Bank of America’s chief executive, Brian T. Moynihan, volunteered in a TV interview what he would say to his 210,000 employees about the chance of artificial intelligence replacing human work.

“You don’t have to worry,” he said. “It’s not a threat to their jobs.”

Last week, after Bank of America reported $8.6 billion in profit for the first quarter — $1.6 billion more than the same period a year earlier — Mr. Moynihan struck a different tone.

The bank’s bottom line, he said, was helped by shedding 1,000 jobs through attrition by “eliminating work and applying technology,” which he repeatedly specified was artificial intelligence. He predicted more of that in the months and years to come…

The veneer of Wall Street’s longstanding assertion — that A.I. will enhance human work, not replace it — is rapidly peeling away, as evidenced by the current quarterly earnings season. JPMorgan Chase, Citi, Bank of America, Goldman Sachs, Morgan Stanley and Wells Fargo racked up $47 billion in collective profits, up 18 percent, while shedding 15,000 employees.

This is part of the promise of AI, that it will make everyone more efficient. I’ve previously highlighted reports that AI, especially Claude Code, is taking over programming in a way that is drastically changing the market for that work. Jobs that used to require a team and take weeks can now be done in a day by one person and a few AI agents. Now the same sort of thing is happening with banks.

At Wells Fargo, artificial intelligence software is generating instant memos on the creditworthiness of potential borrowers, creating the “pitchbooks” that banks use to persuade companies to consider merger deals, and rerouting or automatically answering all types of phone calls from credit card customers, its executives say.

For the moment this all seems to be going well for the banks but eventually the use of this tech will reach their customers who might find it a lot easier to compare offers from other institutions. As AI forces banks to compete with each other more directly, those profits will likely come down.

So, ultimately, this could work out pretty well for consumers, except for the ones who lose their jobs. They may find out that no comparable jobs are available anywhere in another year or two. The entry level positions seem to be hardest hit because, right now, those are the jobs AI can replace. But over time, if AI keeps developing as quickly as it has been, it will be able to reach higher up the career ladder. 

How many layoffs happen before people start to panic? Many of the people leading these companies have argued that, in the long run, AI will create so much abundance with so many fewer workers that we’ll need to offer universal basic income to everyone to make up for the lack of jobs. Maybe that’s true, but can you imagine anything like UBI happening in the next 5 years? I can’t.

Maybe AI hits a wall and the disruption will turn out to be pretty mild. Or maybe, as AI is used to write code for new AI models, this accelerates and in 5 years the whole economy is barely recognizable. I’m not going to make a prediction beyond saying that I find myself thinking about it a lot and wondering if this won’t turn out to be the story everyone is focused on a few years from now.

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