The Massachusetts Institute of Technology (MIT) has released new projections showing AI can already replace 11.7% of the U.S. workforce, equivalent to about $1.2 trillion in wages, spanning finance, healthcare, and specialized professions.
This study was conducted using a tool called "Project Iceberg" Developed by MIT and Oak Ridge National Laboratory (ORNL), this tool simulates the work of 151 million U.S. workers nationwide to assess how AI and various policies might affect them.
The projectIcebergsimulates future scenarios showing how AI will transform the labor market—not just in tech sectors but across all industries nationwide—to help policymakers prepare and plan for workforce changes.
"We are essentially creating a digital twin of the U.S. labor market,"said Prasanna Balaprakash, ORNL director and co-lead of the research. ORNL is a research center under the U.S. Department of Energy.
The Iceberg Index can run population-level simulations that illustrate how AI will alter jobs, skills, and workforce flows before actual economic impacts occur. The simulation treats 151 million workers as "agents" each with data on skills, jobs, occupations, and locations. Skills data covers over 32,000 items in 923 occupations across more than 3,000 states. It then evaluates which skills AI currently can perform.
The findings show that the visible tip of the iceberg, such as layoffs and role changes in technology sectors, accounts for only 2.2% of wage value, or about $211 billion. However, the real impact lies in the submerged part of the iceberg, which represents around $1.2 trillion in wages, especially in often overlooked areas like human resources, logistics, finance, and administrative work.
Researchers note that Project Iceberg is not designed to predict when or where layoffs will occur, but rather to show what AI can currently do, focusing on skills so policymakers can test hypothetical scenarios before committing budgets or passing legislation.
The research team has collaborated with U.S. states including Tennessee, North Carolina, and Utah to model scenarios using real state data. Tennessee was the first state to incorporate the Iceberg Index into its AI Workforce Action Plan.
DeAndrea Salvador, a North Carolina state senator who has worked closely with MIT, said she is interested in this research because it reveals impacts unseen by traditional tools. The most valuable feature is its ability to drill down to local-level data.
"We can examine county-level data down to census details to see what skills exist and the likelihood they could be replaced by AI, as well as the effects on local GDP and employment," she said.
Additionally, Iceberg offers an interactive simulation environment allowing states to test policies, such as reallocating workforce development funds, changing training programs, or assessing how increased technology adoption might affect local employment and GDP.
The report states that"Project Iceberg helps policymakers and business leaders identify risk points, prioritize investments in training and infrastructure, and test measures before spending large amounts of money."
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