AI's next threat: A voter backlash

As investor excitement builds over pending initial public offerings by AI companies, there is looming concern among its most enthusiastic supporters of a populist backlash against a technology that even its proponents have described as a job-killing machine.

Anthropic PBC CEO Dario Amodei famously warned that AI could eliminate half of all entry-level white-collar jobs and spike the overall unemployment rate to 10% to 20% within five years.

"If we look at entry-level consultants, lawyers, financial professionals, many of the kind of white-collar service industries - a lot of what they do, AI models are already quite good at," he said in an interview on "60 Minutes" last fall.

"Without intervention, it's hard to imagine there won't be some significant job impact there, and my worry is that it will be broad and it will be faster than previous technology," Amodei added.

Anthropic and OpenAI Inc. are due to launch IPOs within months - and their private valuations have soared even as skeptics question whether AI's promises justify the extraordinary spending. Space Exploration Technologies Corp., with an AI subsidiary, will go public June 11.

Ian C. Ballon, co-chair of Greenberg Traurig LLP's Global Intellectual Property & Technology Practice Group, said that AI promises major advances in medical research but a great deal of uncertainty - for companies, workers and markets.

"We don't appreciate or understand where everything is going," he said.

"During the dot-com boom, there was the sense that anyone could start a company and hit it big," Ballon added. "Today, there is a sense that a smaller group of people can hit it really big while others may be displaced."

AI spending and layoffs

The hostility toward AI has been reinforced not only by comments like Amodei's but by a series of layoffs at profitable technology companies that are often linked to announcements of increased AI spending.

Meta Platforms Inc. was the most recent example, laying off 8,000 employees last week, transferring 7,000 others to AI-related jobs, while boosting capital spending by at least $10 billion, in part to pay for new data center costs.

Fear of and antipathy toward AI are most pronounced among Gen Z, the group of people most likely to use AI but who fear it will cost them job opportunities. The hostile response to former Google CEO Eric E. Schmidt's commencement pro-AI speech to the University of Arizona illustrated that.

"AI will become a part of how work is done," Schmidt told graduates as he was greeted with boos. "When someone offers you a seat on the rocket ship, you don't ask which seat. You just get on."

A mild pushback?

Attorneys who advise technology company clients have voiced concern about the impact of the midterm elections on AI, although there seems little reason to expect major changes - given that the AI-friendly Trump administration will remain in charge of federal policy and Democrats, especially in California, remain generally supportive.

Gov. Gavin Newsom - a potential Democratic candidate for president in 2028 -- issued an executive order last week ordering state agencies to study the impact of AI-related job losses, including the possibility of revisions to the California Worker Adjustment Retraining Notification Act, but its premise was that a lot of people would be laid off.

Boris Feldman, a partner with Freshfields US LLP and global co-head of Tech, Media and Telecoms, said the November midterm elections are unlikely to make much difference in the progress of AI despite opinion polls showing deep concern about AI and bipartisan opposition to data center construction in cities around the country.

He thinks AI's unpopularity is overstated because voters are more concerned about other issues. "Fears about AI are an elitist problem because they are generally focused on it," Feldman said.

"This is a global event," Feldman said. "If America hamstrings AI, China will zoom ahead. The outcome of the midterms won't materially change how AI is regulated. Politicians can't stop AI any more than they can stop gravity."

While government leaders may require more transparency when companies replace workers due to AI, he said technological advances will outpace regulation.

"President Trump declared war on Anthropic, but their new [Claude Mythos] program was so great that the administration had to put it to the side," Feldman said, even though Anthropic's lawsuit against the federal government is ongoing. Anthropic PBC v. U.S. Department of War et al., 26-cv-1996 (N.D. Cal., filed March 9, 2026).

AI cost, job concerns

Doubts linger about whether AI justifies its costs.

Executives with Uber Technologies Inc. confirmed the company has already spent its annual budget for budget for Anthropic's Claude Code by April, which has prompted a reassessment of how to handle AI spending.

"If you're not able to draw a direct line to how much useful features and functionality you're shipping to your users, that trade becomes harder to justify," Uber Chief Operating Officer Andrew Macdonald said in an interview last Friday on the Rapid Response YouTube channel.

Feldman said that some companies have touted AI's ability to replace human workers in part to impress potential clients and investors. "The hype is fed in part by particular creators," he said. "Some of the breathlessness is artificial."

He acknowledged that it is a "very scary time for college graduates," and that some job opportunities that they may have expected since they started their freshman year -- before the release of ChatGPT -- have vanished or are increasingly competitive.

Leif B. King, a corporate partner at Baker & McKenzie, agreed that young attorneys face challenges.

"The legal profession is about to experience the Industrial Revolution," he said. "Law schools are graduating the same number of students even though jobs for junior lawyers are all but certain to evaporate. Law firms have the same staffing structures as 30 years ago."

"It's a great time to be an experienced lawyer with the power of these new [AI] tools," King added. "And yet it feels like the change is creating as many threats as opportunities."

Many legal observers think a backlash, if it happens, will not occur until there is serious economic pain, such as a stock market crash or skyrocketing unemployment.

Historical analogies

One frequent debate among attorneys is a historical one, considering whether AI is more like transportation advances like railroads, a manufacturing transformation like the Industrial Revolution, the internet dot-com boom, the North America Free Trade Agreement - or something entirely different.

Each analogy has its flaws, and the comparisons often include negative consequences, from busts that followed spending sprees or political upheaval after the collapse of disrupted industries. NAFTA has been blamed for years for the loss of U.S. manufacturing jobs to Mexico and East Asia, a dynamic that led to Trump's election as president.

What do you think the right "comp" is for the AI boom? Will AI be NAFTA for white-collar workers like attorneys and engineers? Will it be similar to the dot-com boom, which led to a bubble that crashed even as the internet survived and thrived? Please contact me with any insights.

CORRECTION: A May 20 edition of the Capital & Counsel newsletter, "LIV and let die," incorrectly identified the first name of the plaintiff who filed a writ of certiorari to the U.S. Supreme Court seeking to reverse a 9th U.S. Circuit Court of Appeals decision upholding the agency's "no admit-no-deny" rule, which has since been rescinded by the agency. The plaintiff's name is Thomas J. Powell. The Daily Journal regrets the error.