There’s more to AI disruption than meets the eye. Here’s what investors should look out for.

From the desk of Miles Everson:

Hi!

I’m thrilled to share another investing insight for today’s  “The Independent Investor.”

Every Wednesday, I talk about investing with the goal of helping you attain financial independence through this activity.

Today, I will talk about the industry-wide disruption AI is bringing about in tech.

Curious?

Keep reading below to know more!

There’s more to AI disruption than meets the eye. Here’s what investors should look out for.

Layoffs have been widespread throughout the tech industry so far in 2025.

In July,  Microsoft  cut 9,000 employees, marking the third round of layoffs since job cuts began at the company during spring.

According to insiders, the company wants to trim headcount in areas where artificial intelligence (AI) has made humans redundant.

Microsoft isn’t the only company who thinks this way. In June,  Amazon ’s CEO Andy Jassy warned employees that job cuts could arise as the firm deploys more generative AI tools and agents, underscoring how AI is quickly reshaping internal workflows and eliminating routine tasks and streamlining operations.

Unsurprisingly, the layoffs and the pronouncement set off alarm bells across corporate America, as even the most profitable tech firms pursued AI-driven layoffs of knowledge workers.

So, does this mean investors should be worried?

While AI itself is an unprecedented technology, tech-driven layoffs are nothing new and here’s what you can expect.

Innovation Triggers Fears and Fuels Growth

New technology has always been framed as a job threat for over 200 years.

In the early 19th century, British textile workers known as Luddites feared they would be replaced by automated looms. They organized raids, breaking into factories and smashing the machinery they saw as a threat.

… but while folks didn't need to be skilled craftspeople anymore, the shift made textile mills a year-round operation. That increased job security for the workers who oversaw the machines.

Said another way, the mechanization of textiles didn't destroy the market. It made goods cheaper and more accessible while boosting employment in related industries.

According to  Professor Joel Litman , Chairman and CEO of  Valens Research  and Chief Investment Officer of  Altimetry Financial Research, this pattern has played out all throughout history. Be it the advent of the assembly line in the 1910s, office computing in the 1980s, and even automation in manufacturing through the 2000s.

Each time a new innovation cropped up, jobs in certain sectors declined while others rose in their place to meet new demands.

Let’s take U.S. manufacturing for example, which has been undergoing automation since the 1970s.

Employment in the sector fell from nearly 20 million in 1979 to about 13 million by 2019.

However, the overall job market didn't go bust. During the same period, total U.S. nonfarm employment grew from roughly 90 million to 150 million.

The U.S. labor market remains resilient despite this wave of layoffs spurred by AI. As of September 2025, total nonfarm employment stands at around 159 million.

Big Tech Job Cuts Might be Making Headlines, But There’s More To It

It’s true that AI will displace some white-collar roles, especially routine roles in sales, customer service, and operations.

Recent Big Tech layoffs also included "layoff resistant" jobs. A significant portion of Microsoft's cuts hit software engineers.

Despite that being the case, these changes will eventually unlock new capabilities, just like prior innovations did. In other words, there will be more demand for products and services that didn’t exist before.

Eventually, new industries would be built on AI. That’s why even though job cuts may be making the headlines today, there’s more to them than meets the eye.

As Professor Litman said,  “there’s always opportunity in the disruption.”

As an investor, this isn’t just a concept you should apply when looking at news, but also in how you evaluate the markets. After all, times of massive disruption often present outsized opportunities for those who can spot them.

Hope you’ve found this week’s insights interesting and helpful.

Stay tuned for next Wednesday’s The Independent Investor!

Some of the loudest alarm bells in Washington aren’t coming from political opponents or activist groups—they’re coming from inside the Republican Party itself.

Learn more about  this USD 5.5 trillion misunderstanding  in next week’s article!