It’s becoming clear that AI is changing the world of work. Regularly digging into company reports, I’m seeing firms rapidly adopting powerful AI tools to boost productivity. And given the impact that might have on jobs, I think having a passive income stream could become more important than ever.
The AI revolution
ChatGPT was released in late 2022. And what started with chatbots writing essays has quickly spread into customer service, creative fields, and even law and medicine. Tasks that once seemed safe — paralegal work, creating adverts, even analysing X-rays — are now vulnerable to automation.
For businesses, the promise of AI is huge. It can lower costs, boost productivity, and fatten profit margins. That’s why corporate adoption of the technology is happening at such a blistering pace.
Worryingly though, there’s a possible downside. In the UK, youth unemployment is rising, with some saying AI is a factor (fewer entry-level jobs).
The next tech wave brewing is AI agents. These are intelligent software programmes that can take action on their own to achieve a particular task, thereby automating more back-office roles/jobs.
Yuval Noah Harari, who is a prominent writer on the subject, says the AI revolution can be thought about as “a wave of billions of AI immigrants. They don’t need visas. They don’t arrive on boats. They come at the speed of light. They’ll take jobs”.
Breathing space
As alarming as this sounds, AI won’t replace all jobs. I don’t envisage a Tesla Bot marching into my house to fix my gas boiler anytime soon. And this technology will undoubtedly create new jobs that don’t currently exist.
But if AI makes certain skills redundant or drives down wages, workers may find themselves scrambling to adapt. And in such an environment, that’s where passive income from dividends would come in very handy.
This income could help cover living expenses if a primary job is lost, allowing individuals to retrain for new roles. This would provide valuable breathing space.
Moreover, if AI makes companies more efficient, shareholders will likely reap the benefits. This would be in the shape of potentially higher dividends and share prices.
The robots may do much of the work in future, but dividends will always flow to human shareholders.
FTSE 250 stock
As for stocks, I don’t think miners are threatened by AI. But it can be tricky to pick the right one, so I prefer BlackRock World Mining Trust (LSE: BRWM).
This FTSE 250 investment trust holds dozens of top global players, offering exposure to copper, steel, gold, silver, and more. Top holdings include Rio Tinto and BHP.
One thing worth noting, however, is that miners are tied to the fate of the global economy. If it enters a downturn, mining stocks would follow, negatively impacting the trust’s valuation.
However, many mined metals should soar in value in future as the global energy transition gathers pace. That’s because demand is tipped to far outstrip supply, which should support higher prices.
While not guaranteed, this should filter through to higher dividends over time. Right now, the trust offers a starting 4.1% dividend yield.
Foolish takeaway
Passive income could provide a vital financial safety net in a changing economy. I don’t see miners being disrupted, making BlackRock World Mining one to think about for dividends.
