Why AI Forecasts Fail to Materialize

Right/wrong: A year ago, many business leaders warned that AI would wipe out jobs. Recently, though, chief executives in tech have begun to sound more hopeful, according to Katherine Bindley of The Wall Street Journal, who cites OpenAI CEO Sam Altman’s earlier remark that “we’ve largely been correct about technological trends while somewhat mistaken about their social and economic effects.”

It remains unclear whether Altman, along with his competitor Dario Amodei of Anthropic—who recently shifted from suggesting that half of entry-level jobs could disappear to saying firms can “achieve the same outcomes with fewer resources”—are softening their predictions to avoid alarming people, acknowledging they were somewhat wrong, or because, over a year into the race, they were also trying to hype the stakes. Perhaps all of the above is true.

Naturally, disentangling these motives in retrospect will be tricky. Tech executives often fault AI for layoffs even when the real causes lie elsewhere.

This isn’t solely about efficiency, remarked Jack Dorsey to shareholders in February, noting he had halved his workforce at Block. He argued that “intelligence tools alter what it takes to design and operate a company…a much smaller team, equipped with the tools we’re building, can accomplish more and do it better.” Whether that’s true remains up for debate, or whether many workers simply weren’t delivering meaningful value. When Coinbase’s Brian Armstrong announced a similar downsizing, he framed it this way:

This is an email I sent earlier today to all employees at Coinbase:

Team,

Today I’ve made the difficult decision to reduce Coinbase’s headcount by roughly 14%. I’d like to walk you through the reasons behind this move, what it means for those affected, and how it positions us for the…

— Brian Armstrong (@brian_armstrong) May 5, 2026

As for the AI leaders, MIT economist David Autor told the Journal that they may have realized the labor market isn’t collapsing as rapidly as they predicted. “They may have understood that claiming your groundbreaking product will destroy the economy was bad business,” he suggested. And executives at other companies that have deployed AI tools without building their own models frequently struggle to distinguish deployments that actually pay off from those that squander resources. Determining which roles can be automated successfully—and which cannot—demands trial and error, adjustments, and recalibration. It isn’t as obvious as some early forecasts suggested.

Thus far, the most dramatic shifts have touched coders the most. Entering the programming field has long been a sensible route for technically inclined individuals. AI advances are lifting some coders’ capabilities, and AI-assisted coding is elevating others to higher levels. Even a writer like me can attempt some basic coding now, albeit imperfectly. To a large extent, this field will become far more capable and efficient thanks to AI, but a portion of coding jobs may disappear, and a once-stable, well-paid sector could face volatility. (Personally, I worry less about broad economic disruption than about the culture clash among developers and the potential for heated exchanges in the online comment sections around these topics.)

Scenes from New York: Shark season is underway.

QUICK HITS

• Love this, from a friend of mine, Inez:

There’s a corner in lower Manhattan opposite Trinity Church, not far from the New York Stock Exchange, where you can sense the village that grew into a colossal metropolis. Trinity Church’s first building was erected almost a century before the United States even existed.

— Inez Stepman ⚪️🔴⚪️ (@InezFeltscher) July 5, 2026

• “Santa Monica is in recovery mode,” The Wall Street Journal notes. “It’s trying to rebound from a string of challenges—rising liability settlements, reduced international tourism, and years of shrinking retail—that led the city, with around 90,700 residents, to declare fiscal distress in September.”
• “The [Democratic] party, which often seemed directionless since Mr. Trump’s return, is testing in real time whether it can push further in key races by backing populist progressives who energize the base, or by selecting more traditional, centrist contenders,” reports The New York Times. I’m curious how this plays out. Relatedly:

Socialist candidates are enjoying a banner year.

And yet, the dream of American socialism (or social democracy) seems to be slipping further away.

Even as voters warm to the idea of socialism as a concept, they are cooling on its core prerequisite: higher taxes… pic.twitter.com/PoHHHQZzC6

— Eric Levitz (@EricLevitz) July 2, 2026

• “Across major demographic and partisan groups, more Americans support than oppose banning those under 16 from using social media,” Pew finds. “Half or more of adults in every age bracket back this approach. Adults aged 30 to 49 show the strongest support. Parents of a child under 18 are more likely to back this ban than those without a child under 18.”
• Everything about this topic carries a somewhat grim tone:

Daily Mail is hiring a U.S. Influencer Correspondent to cover creators and, allegedly, disrupt their lives. pic.twitter.com/srmStsORlf

— EMILY SUNDBERG (@Emily_Sundberg) July 6, 2026