PayPal and IBM Embrace A.I. to Cut Costs and Improve Performance

Artificial Intelligence (A.I.) has been a buzzword in the tech industry for quite some time now, with companies investing heavily in it to improve their operations and stay ahead of the competition. PayPal and IBM are the latest companies to join the A.I. bandwagon, using the technology to cut costs and appeal to investors.

PayPal’s CEO, Dan Schulman, stated in the company’s earnings call that they expect A.I. to help them operate more efficiently in the future, and lower their costs for years to come. He also believes that A.I. combined with their unique scale and sets of data will not only drive efficiencies but also provide a differentiated and unique set of value propositions for their merchants and consumers. However, while the company didn’t explicitly say that A.I. would lead to job cuts, it’s worth noting that it could be a consequence of using the technology to reduce costs.

On the other hand, IBM’s CEO, Arvind Krishna, admitted in a recent Bloomberg interview that A.I. could replace nearly 8,000 of the company’s jobs. According to him, the technology could handle simple tasks like shifting employees between departments, thereby reducing the need for human intervention. However, this announcement didn’t sit well with investors, and IBM’s shares have been down since the story broke.

It’s worth noting that the use of A.I. to cut costs is not a new concept. Many companies, particularly those in the financial and tech industries, have been using the technology to automate repetitive and time-consuming tasks, thereby reducing the need for human workers. This has led to concerns about job security, particularly in industries where automation is expected to have the most significant impact.

However, it’s essential to note that A.I. can also lead to higher performance and better results. Schulman believes that A.I. will impact almost every function inside PayPal, including their front office, back office, marketing, legal, engineering, and more. He notes that A.I. will allow them to do things better and improve their overall performance, not just reduce costs.

The use of A.I. to cut costs is a prevalent strategy in the tech industry, with companies like PayPal and IBM embracing the technology to remain competitive. While it could lead to job cuts, A.I. also has the potential to improve performance and deliver better results. As companies continue to explore the possibilities of A.I., it’s essential to consider the potential consequences and ensure that the technology is used responsibly.

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