Insider Today: Tech's biggest lie
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Welcome back! Find someone as committed to you as much as Mark Sumersett is dedicated to surfing. Sumersett isn't giving up surfing despite a shark biting his face last week.
"Heck yeah, I'm going surfing again," he told the local news. "Because I love it. There's nothing in the world that makes me feel better than surfing."
In today's big story, we're looking at the most compelling argument for why the AI boom likely will only benefit those at the top, as opposed to all of us.
What's on deck:
- Markets: Inside Wall Street's hottest career move.
- Tech: Generative AI's boom comes with big cybersecurity risks.
- Business: The incredible story of hip-hop's forgotten moguls, the Henchman brothers.
But first, a rise in tide doesn't always raise all ships.
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The big story
The AI heretic
One of the leading experts on technology's impact on the economy has some bad news: AI is on track to do more harm than good.
MIT economist Daron Acemoglu is highly respected and a best-selling author. But his latest position disputes the notion widely believed by his peers that new tech always leads to everyone having a better life, Insider's Aki Ito writes.
Acemoglu argues new technology, in and of itself, hasn't been the catalyst for widespread economic growth that most have touted it as. In actuality, tech only benefits and enriches those at the top and harms broader society when left to its own devices.
It's an important distinction, Aki writes, as new technology has been pitched — particularly during the AI boom — as net-positive. Executives like to say innovations will empower employees to work better instead of making them obsolete.
But that equation only works, Acemoglu says, if the tech creates more new tasks than it takes away and there is a balance of power between employer and employee.
Unfortunately for us, we fail on both counts when it comes to the AI boom.
Acemoglu's research found that every additional robot introduced since 1990 has reduced employment by roughly six humans. That type of math doesn't indicate tech is leaving much work for the rest of us.
Meanwhile, the power dynamics between boss and employee have gotten increasingly lopsided. CEOs made about 272 times more than their workers in 2022, according to a recent report. And the percentage of unionized workers has dropped to a record low.
If you're banking on regulators coming to the rescue, good luck. In recent years, some members of Congress have lacked a basic understanding of technology, let alone something as complex as generative AI.
In the meantime, tech companies aren't slowing down, as they help themselves to plenty of our data to train their models. It's led to a "shadow war" over the information, former GitHub CEO Nat Friedman said in a recent interview.
But maybe it won't be that bad? AI leaders like to talk about how everyone will have a tech-powered assistant.
Maybe that'll help us find ways to fill the hours of the day since we'll all be out of work.
3 things in markets
- Private credit is the hottest job on Wall Street. Money managers willing to lend are hitting it big thanks to sky-high interest rates and risk-averse big banks. The $1.5 trillion market, which offers impressive pay packages, is in the middle of a talent frenzy.
- Just when you thought the housing market couldn't get any worse. The median monthly mortgage payment — $2,632 — is now at an all-time high, according to a new Redfin report. And it's set to get worse, as recently purchased homes with the highest mortgage rates since 2001 haven't yet been priced into the data.
- Be prepared to sleep in the office if you want to run a successful hedge fund. Renaissance Technologies CEO Peter Brown said he spent 2,000 nights in his office and didn't "see how I could do it otherwise." The result: The firm's flagship fund averaged nearly 70% returns over two decades.
3 things in tech
- Salesforce CEO warned about the perils of generative AI — unless it's from his company. Marc Benioff spent much of the annual Dreamforce conference sounding the alarms on how untrustworthy generative AI is right now.
- A trio of AI pioneers: "The scholar, the pragmatist, and the rainmaker." The three partners of Bloomberg Beta have been prolific AI investors for more than a decade. Here's how they rewrote the VC playbook.
- McAfee CEO warns about the "exploding" cybersecurity risks that generative AI poses. Greg Johnson highlighted how the technology is making phishing more sophisticated. This can include fake AI-generated phone calls or videos that indicate your loved one is in distress.
3 things in business
- Tupac, cocaine, murder: The incredible saga of the Rosemond brothers. They founded rap's most notorious management firm and were responsible for the likes of The Game, Salt-N-Pepa, Akon, Sean Kingston, and Gucci Mane. But the firm was originally created as a "hideout" for their drug empire.
- The two work archetypes: 9-to-5 "splitters" and flexible "blenders." There's a major disconnect between workers and bosses. Around half of Americans want a defined 9-to-5 work schedule. Meanwhile, bosses think most workers want to do chores throughout the day alongside work.
- A guide on when to tip and when it's okay to skip. More and more places are asking for tips. Etiquette experts revealed that it's okay to skip tipping for things like takeout and coffee. Meanwhile, you may want to tip for food deliveries.
In other news
- Former and current Sweetgreen employees are suing the salad company, alleging racial discrimination.
- Google cofounder Sergey Brin quietly finalized his divorce from Nicole Shanahan on May 26, court records show.
- Here's how to fight seasonal allergies while avoiding medication side effects.
- President Joe Biden's economic policies have quietly made people's lives better by providing essentials like clean water and internet access.
- Gen Zers respond to accusations that they're lazy and don't want to work.
- A recap of the 2023 superyacht summer.
What's happening today
- The 16th Annual Academy of Country Music Honors is tonight. The award show is hosted by Carly Pearce for the third year in a row and will air on FOX.
- It's International Equal Pay Day. The UN General Assembly created this day in 2019 with "equal pay for work of equal value" in mind. Globally, there is an estimated 20% gender pay gap.
- Earnings today: Stitch Fix and other companies.
For your bookmarks
A longevity expert shared his centenarian-inspired exercise routine. It includes 150 minutes of intentional exercise every week and walking every day.
The Insider Today team: Dan DeFrancesco, senior editor and anchor, in New York City. Diamond Naga Siu, senior reporter, in San Diego. Hallam Bullock, editor, in London. Lisa Ryan, executive editor, in New York.
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