Some half of all jobs worldwide — or up to 800 million total jobs — could be at risk of becoming obsolete by 2035 due to the rise of automation.

That’s the assessment from a new report written by Bank of America Merrill Lynch (BAC) analysts highlighting 10 themes to watch for the next decade — and artificial intelligence is one of them.

To make matters worse, robots are getting cheaper, the analysts said, with industrial robotic costs falling 27% from 2005 to 2014. Those costs could decline another 22% by 2025.

While the analysts acknowledge that automation isn’t a new phenomenon and has been used across the economy for decades, they predict “the next generation of robotics and automation could be even more transformative.”

Plus, it’s not just factory jobs that robots can replace.

“Increasingly office and service sector tasks are being automated due to improvements in computing and software,” the analysts wrote.

Industrial robot in modern factory

U.S. vs. China

The race to develop artificial intelligence technology could also have geopolitical implications. China is taking the promise of artificial intelligence seriously. That’s why Bank of America is expecting some big changes to the current trade war between the U.S. and China that has persisted for almost two years.

“We believe the current trade war will transition towards a tech war in the 2020s, which will see a new "arms race" between the U.S. and China to reach national superiority in technology over the long term vis-a-vis quantum computing, big data, 5G, artificial intelligence, electric vehicles, robotics, and cybersecurity etc,” they wrote.

They also say that China wants equal U.S. dominance in artificial intelligence by next year but become the worldwide leader in artificial intelligence by 2030.

Scott Gamm is a reporter at Yahoo Finance. Follow him on Twitter @ScottGamm.

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