Morgan Stanley: AI to Bring $920B in Benefits, Transform 90% of Jobs

Morgan Stanley has highlighted that the market is significantly underestimating the non-linear advancements in AI capabilities and the disruptive impact they will have. The firm predicts that 90% of professions will be affected by AI automation and enhancement, leading to a fundamental transformation in the job market.

According to Morgan Stanley, the widespread adoption of AI could bring approximately 920 billion dollars in long-term benefits to S&P 500 companies. This figure exceeds 25% of the expected pre-tax total revenue of S&P 500 companies by 2026. The report emphasizes that the market is severely underestimating the speed at which AI capabilities are advancing in a non-linear fashion and the disruptive impact this will have.

The report identifies two main areas where the potential for value creation is significant: intelligent AI, which is software-based and used for automating and enhancing knowledge-based work, and embodied AI, which is applied in the physical world, primarily in the form of robots. Morgan Stanley predicts that by 2050, the global market for humanoid robots will reach 500 billion dollars, roughly double the combined revenue of the top 20 global automobile manufacturers in 2024.

Industries expected to benefit the most from AI include essential consumer goods distribution and retail, real estate management and development, transportation, and medical equipment and services. The report notes that its analysis of value creation is conservative, as it does not fully account for the future non-linear advancements in AI capabilities or the additional benefits from AI-enhanced human workers performing higher-value tasks.

Morgan Stanley believes that the market is generally underestimating the non-linear speed at which AI capabilities are advancing. This dynamic is key to generating significant alpha opportunities. The report cites data from an independent AI assessment organization, which suggests that AI performance, measured by the length of tasks an AI agent can complete, has been growing exponentially over the past six years, with a doubling time of approximately seven months.

Following this trend, it is projected that within five years, AI agents will be able to independently complete most software tasks that currently require humans to spend days or even weeks. Additionally, the report references a paper by thought leader Leo Aschenbrenner, who predicts another significant qualitative leap from GPT-2 to GPT-4 within the next four years.

To support this view, the report cites a case study from Microsoft, where its medical AI diagnostic system (MAI-DxO) achieved an 85% accuracy rate in diagnosing real cases published in the New England Journal of Medicine, which is more than four times higher than that of a group of experienced doctors. If AI capabilities continue to advance at this rate, Morgan Stanley expects that the returns for AI adopters, as well as the value of AI infrastructure, particularly in terms of power, will far exceed current expectations.

The report also focuses on the impact of AI on the labor market, stating that approximately 90% of professions will be affected by AI automation and enhancement. Historical evidence shows that technological changes reshape the job market, similar to how the advent of electronic spreadsheets eliminated some accounting jobs but created new roles like data analysts. AI is expected to bring about a similar, albeit more dramatic, transformation.

Key evidence from Stanford University research indicates that in sectors most affected by AI, entry-level job recruitment has significantly slowed. For instance, the number of 22- to 25-year-old software developers employed decreased by nearly 20% from the end of 2022 to July 2025. Customer service representative positions have also seen a similar decline. The report emphasizes that this impact is primarily concentrated in jobs easily automated by AI, while positions where AI can enhance human capabilities continue to see stable employment growth.

Additionally, the impact of embodied intelligence on employment cannot be overlooked. For example, Amazon's warehouse robot count surged from 100,000 units in 2017 to 750,000 units in 2023, with the employee-to-robot ratio decreasing from approximately 4.5:1 to 2:1 during the same period. In manufacturing, construction, and logistics, humanoid robots are expected to further reduce costs. Research shows that the fully loaded cost of AI-enhanced robots in U.S. factories is about 5 dollars per hour, compared to the average hourly wage of 36 dollars for factory workers in the U.S.

In summary, Morgan Stanley's report paints a picture of an AI-driven future that is accelerating rapidly. In this future, the scale of value creation is in the trillions of dollars, but the job market will also undergo fundamental disruption and restructuring. For investors who can perceive and navigate this non-linear transformation, this era presents both significant challenges and immense opportunities.