Key Takeaways

  • We are cautious optimists on AI’s eventual productivity

    impact. The lack of a measurable impact thus far is not

    a good reason to downplay its potentially

    transformative effect. Previous general-purpose

    technologies have taken time to raise productivity.

  • Economic history suggests that job creation and

    productivity enhancement from technological change

    more than outweigh job destruction over the long run.

    That said, one risk is that the scope of job types under

    threat from AI means this time could be different.

  • Certain sectors will be outsized beneficiaries from AI.

    In the near term, these are ‘enablers’ like chip

    manufacturers, ‘scalers’ such as platforms, and ‘early

    adopters’. In the long term, those with large numbers

    of knowledge workers and lots of administration, such

    as finance, education and the law, are the biggest

    beneficiaries (from the perspective of capital).

  • Governments and regulators face a pacing problem

    whereby the rate of innovation is so rapid that policy

    struggles to keep up. We anticipate a wave of AI

    regulation, focused on human oversight, accountability

    of decision making, privacy, and bias.

  • Finally, AI hardware and software will become a new

    locus of geopolitical competition. Export bans of

    leading-edge graphics processing units are already

    part of the arsenal of US-China rivalry. The values

    embedded in AI decision making, and its dual-use

    military and commercial applications, raise the

    prospect of a cyber arms race.


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