AI is dimming job prospects for less-experienced workers, according to a first-of-its-kind Stanford study.

Why it matters: There's been significant anecdotal evidence of an AI-related slowdown in hiring for certain jobs, but new data shows a real and measurable impact for entry-level workers.

Driving the news: Using ADP payroll data, Stanford researchers found that employment for younger workers (ages 22–25) in AI-impacted jobs — like software development and customer support — has dropped by 16% since late 2022.

• "There's definitely evidence that AI is beginning to have a big effect," economist and Stanford professor Erik Brynjolfsson told Axios.
• What's notable is the speed with which the job shift has gone from theoretical to real and significant. "This is the fastest, broadest change that I've seen," he said, noting the only comparable shift was the one to remote work amid the COVID-19 pandemic.

Yes, but: Older workers and those in other fields aren't seeing a measurable hit to job prospects.

• Brynjolfsson said that the disparate effects may stem from the fact that AI, like recent college graduates, has more book knowledge than on-the-job experience.
• "More senior workers have more tacit knowledge, they learn tricks of the trade that maybe never get written down," he said. "Those are not the things that the AI has been able to learn, at least not yet."

The big picture: Even if demand is steady or rising for more experienced workers, industries will struggle to find the next generation if people can't get a first job in the field.

• "We're going to have to think about how the labor market adjusts so that everyone gets a chance to be working their way up the career ladder," he said.
• Businesses are still struggling to get across-the-board gains from AI, with most benefits concentrated in a few job categories, such as coding and customer service.

Between the lines: When Brynjolfsson and his colleagues first looked at the data in aggregate, it didn't appear that AI was having a large overall impact on jobs. But once they started looking at specific job types and experience, the impact became clear.

• The team also tried to rule out other causes, such as changes to remote work policies and the cyclical nature of the tech industry. "You can't know for sure, but it does look like AI is behind these big changes."
• Brynjolfsson said that there is also a big difference in job loss based on how companies deploy AI.
• Those who seek to use the technology to augment their human workforce are hiring more, while those who view AI as a replacement for human workers, not surprisingly, are hiring less.

What we're watching: One of the key unknowns is whether AI will continue to predominantly affect entry-level jobs or if higher-skilled workers are also at risk as the technology improves.

• "That's the multitrillion-dollar question," Brynjolfsson said.
• Younger workers may be simply the first wave to be impacted, with more people losing jobs as the technology improves. "It's certainly plausible that what we're seeing is just the canary in the coal mine," he said.
• Brynjolfsson said he and his colleagues are creating an "AI economic dashboard" that offers hiring and wage data on a near-real-time basis so workers and employers know where to focus their training efforts.

An image-editing tool known as Nano Banana that went viral in recent days is indeed — as many users had guessed — a Google project, the company confirmed today, and is being added to the Gemini app.

Why it matters: Nano Banana is the latest in a series of image-editing tools that have captured the internet's public eye, impressing users with its ability not only to generate new images but to refine them — a skill that has proven elusive to AI makers.

Driving the news: Google said the model that had been making waves under its code name will be available starting today to free and paid Gemini users on the web and in its mobile apps.

• Under the Nano Banana name, the model had already been outperforming other models on the LMArena charts for image editing and generating significant buzz on social media.

How it works: The new tool lets people create a photo from text or based on an existing image.

• Google says the model is also better than prior models at multi-step edits.

The tool can also combine two images.

• Google showed an example of one image getting transformed into a pattern that was then applied onto boots in another photo.

Between the lines: While AI has proved helpful at generating images, it has tended to falter in the editing stage, particularly when asked to make changes to photos of real people.

• Google says its new tool is better than its and others' previous models at making sure the subject of a photo doesn't start to look like someone else, especially as edits pile up.

Flashback: OpenAI saw a surge of ChatGPT downloads and usage after it released a highly capable image generator in March.

Yes, but: The more Google and its rivals refine their AI tools' ability to combine images or display people in new settings, the greater the threat of users creating deepfakes and misinformation.

Anthropic analyzed 74,000 anonymized conversations with its Claude chatbot to understand how university educators are using AI.

Why it matters: The study found that some educators are using chatbots for grading — a task many teachers say should not be outsourced.

How it works: Anthropic analyzed anonymized conversations on Claude.ai from higher education professionals from May to June.

• The company used a tool called Clio ("Claude insights and observations"), which tracks Claude usage while preserving user privacy.

By the numbers: Clio found that 57% of higher ed instructors' AI chats in its sample involved developing curricula, 13% were conducting academic research, and 7% involved assessing students' performance.

The big picture: Anthropic says educators used AI for grading less often than other tasks. But 48.9% of the Claude conversations about grading turned the task fully over to the bot in ways that researchers found "concerning."

The intrigue: After years of universities banning students from using chatbots, students are now pushing back as they see professors adopt the same tools.

• A student at Northeastern demanded her tuition back after catching one of her professors using AI and not disclosing it, per the New York Times.

Yes, but: Kunal Handa, research resident at Anthropic's Societal Impacts team, told Axios there are "fundamental limitations of analyzing this sort of data from a chat interface."

Read more

• Elon Musk's X and his AI startup xAI have sued Apple and OpenAI over their partnership to integrate ChatGPT into the iPhone. (Axios)
• A Montana restaurant is begging customers to stop asking for specials recommended by Google's AI and instead stick to those the restaurant is actually offering. (Futurism)

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