AI already capable of replacing 12% of US workforce: MIT
What's the story
A recent study by the Massachusetts Institute of Technology (MIT) has found that artificial intelligence (AI) could replace as much as 11.7% of the US labor market. This translates to a staggering $1.2 trillion in wages across sectors such as finance, healthcare, and professional services. The research was conducted using a labor simulation tool called Iceberg Index, developed by MIT and Oak Ridge National Laboratory (ORNL).
Simulation tool
Iceberg Index: A digital twin for the US labor market
The Iceberg Index provides a forward-looking view of how AI could reshape the labor market across all states in America. "Basically, we are creating a digital twin for the US labor market," said Prasanna Balaprakash, ORNL director and co-leader of the research. The index runs population-level experiments to show how AI reshapes tasks, skills, and labor flows long before those changes show up in real-world economy scenarios.
Skill mapping
The index maps skills across occupations
The Iceberg Index treats 151 million workers as individual agents, each tagged with their respective skills, tasks, occupation, and location. It maps over 32,000 skills across 923 occupations in 3,000 counties. The researchers found that the visible impact of AI on jobs—layoffs and role shifts in tech and IT—represents only a small portion (2.2%) of total wage exposure or about $211 billion.
Wage exposure
AI's impact extends beyond tech roles
The total wage exposure from AI, including routine functions in human resources, logistics, finance, and office administration, is a whopping $1.2 trillion. This figure goes beyond the visible effects of layoffs and role shifts in tech and IT. The Iceberg Index isn't a prediction engine for job losses but provides a skills-centered snapshot of what today's AI systems can already do.
Policy impact
States are already using Iceberg Index for policy-making
The researchers have partnered with state governments to run proactive simulations. Tennessee, North Carolina, and Utah have used their own labor data to validate the model and are now building policy scenarios based on it. Tennessee has already cited the Iceberg Index in its official AI Workforce Action Plan released this month.
Risk assessment
Iceberg Index challenges AI risk assumptions
The Iceberg Index also challenges the common assumption that AI risk will remain confined to tech roles in coastal hubs. Its simulations show exposed occupations across all 50 states, including inland and rural areas often left out of the AI conversation. To address this gap, the team has built an interactive simulation environment for states to experiment with different policy levers and their potential impact on local employment and GDP.