Howard Marks Warns AI Will Displace Vast Swaths of Knowledge Work

Howard Marks, the co-founder of Oaktree Capital and one of the most respected voices in global finance, has issued a provocative warning that artificial intelligence is set to eliminate a "huge percentage" of knowledge work. This assessment, delivered during a period of rapid AI integration across the financial and professional services sectors, signals a fundamental "sea change" in how human capital will be valued, deployed, and compensated in the coming decade. For HR professionals and workforce strategists, Marks’ commentary is not merely a technological forecast but a structural mandate to rethink the very nature of the corporate hierarchy.

The core of the disruption lies in the democratization of expertise. For decades, "knowledge work" was defined by the ability to gather, synthesize, and report on complex data sets—tasks that required expensive university degrees and years of professional seasoning. Marks suggests that AI’s ability to perform these functions at near-zero marginal cost effectively commoditizes the "first-level thinking" that has long been the bread and butter of the white-collar workforce. When a large language model can draft a legal brief, perform a financial audit, or write functional code in seconds, the market value of those specific skills inevitably collapses.

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Howard Marks, the co-founder of Oaktree Capital and one of the most respected voices in global finance, has issued a provocative warning that artificial intelligence is set to eliminate a "huge percentage" of knowledge work.

This creates what many industry analysts are calling the "Apprenticeship Crisis." In traditional professional services—law, consulting, and finance—junior employees are hired to perform high-volume, lower-complexity tasks. This "grunt work" serves a dual purpose: it provides the firm with necessary output and provides the employee with the foundational experience required to eventually move into senior leadership. If AI assumes these entry-level responsibilities, the traditional path to seniority is severed. HR leaders must now grapple with a critical question: how do you develop a partner-level strategist if they never spent their early years "in the weeds" of the data? The risk is a future leadership vacuum where senior executives lack the intuitive grasp of their business that only comes from foundational experience.

Furthermore, Marks’ perspective highlights a shift toward "second-level thinking" as the primary human differentiator. In his investment philosophy, first-level thinking is simplistic and superficial, while second-level thinking is deep, complex, and considers the reactions of others. In the age of AI, "first-level" knowledge work—calculating a discounted cash flow model or summarizing a meeting—is now a utility. The human premium will shift entirely to "second-level" tasks: navigating complex organizational politics, managing client emotions, making high-stakes ethical judgments, and identifying the "hallucinations" or biases in AI-generated data. We are moving from an era of "doing" to an era of "editing and auditing."