Top bank reveals sheer scale of the machines coming for our jobs
America’s top companies could save almost $1 trillion each year as they implement AI technology to reduce their headcount.
Morgan Stanley estimates that companies in the S&P 500 could save $920 billion in net annual benefits once they start using ‘agentic’ AI software and ’embodied’ AI humanoid robotics.
Agentic AI software is made up of systems that can accomplish a specific goal with limited supervision.
Unlike generative AI, which powers popular tools like ChatGPT, agentic AI will make autonomous decisions.
AI humanoid robotics are machines that look like humans that learn and adapt by interacting with the physical world.
The sweeping analysis by Morgan Stanley found that 90 percent of jobs will be affected in some way by AI automation or augmentation.
The massive cost savings being forecast will come from reduced headcount and the automation of repetitive or information-heavy tasks. Overall, companies will spend less on salaries and get work done faster, Morgan Stanley predicts.
The estimated savings are equal to approximately 28 percent of the index’s 2026 pretax earnings.
Morgan Stanley estimates that companies in the S&P 500 could save $920 billion in net annual benefits once they start using ‘agentic’ AI software and ’embodied’ AI humanoid robotics
However, Morgan Stanley’s Thematic Investing team warns that these savings won’t happen quickly and it could take many years.
Some companies also may not get the full benefit because they cannot completely adopt AI into their day-to-day.
The team explained that the $920 billion in savings is equal to 41 percent of what S&P 500 companies spend on employee pay.
The analysis only covers about 90 percent of the companies in the S&P 500, because there was not enough data for the rest.
AI will create economic value by making tasks cheaper and faster to do with less manpower, therefore allowing remaining employees to focus on valuable work that brings in more money and improves profit margins.
The mix of these effects (cost savings vs. revenue growth) will be different depending on the industry and type of job.
The sectors that could benefit the most are consumer staples distribution and retail, and real estate management and transportation, with potential AI-driven productivity benefits exceeding 100 percent of predicted 2026 earnings in these industries.
However, these gains come at the loss of workers who will be replaced by AI technology.
Humanoid robots follow technicians to learn job skills at an embodied AI robot innovation center in China
AI humanoid robotics are machines that look like humans that learn and adapt by interacting with the physical world
The effect AI has had on US jobs has already been profound
Health care equipment and services, autos, and professional services are also vulnerable.
Meanwhile, industries – such as semiconductors and hardware – that don’t use a lot of workers compared to how much money they make have less to gain from using AI to replace or assist workers, so the potential value of AI in those industries is lower.
The effect AI has had on US jobs has already been profound.
US-based employers announced 85,979 job cuts in August, up 39 percent from the 62,075 announced in July, according to a report by career advice firm Challenger, Gray & Christmas.
August’s total was the highest for the month since 2020, when 115,762 job cuts were recorded.
Technological updates – including automation AI implementation – led to 20,219 job cuts in 2025, while 10,375 were explicitly attributed to AI, according to the report.