Artificial Intelligence Propelling Economic Growth in the U.S.
Artificial intelligence (AI) is significantly contributing to the economic expansion in the United States, although its impact on employment remains relatively minimal.
This assertion is supported by a recent report from the Bank of America (BofA) Institute, which argues that capital investments related to AI, particularly in software and computational sectors, are pivotal forces behind GDP growth moving into 2025.
According to the report, “After a minor contraction in Q1, GDP rebounded in Q2, registering a 3.8% increase for an annualized growth rate of 1.6% in the first half of the year.”
It further elaborates that “A key factor contributing to this growth resilience is the substantial investment directed towards technology and AI-related ventures.”
Despite widespread apprehensions regarding potential job losses attributed to AI, the report indicates the absence of significant evidence to substantiate these fears at present.
“A comparison between the levels of AI deployment and year-to-date employment shifts in major industries reveals a marginally negative correlation between heightened AI utilization and job growth,” the report notes, adding that “this correlation is statistically insignificant.”
Conversely, BofA highlights that sectors such as finance, professional services, and information technologies are witnessing a favorable relationship between AI adoption and job creation.
“These insights imply that AI predominantly augments productivity within white-collar professions,” the researchers from BofA state.
Nevertheless, the report elucidates certain caveats. For instance, during economic downturns, firms may adopt different strategies wherein “AI might facilitate larger layoffs rather than job growth during periods of stable development.”
Furthermore, research conducted by PYMNTS Intelligence reveals that while over half of American adults regularly interact with generative AI, there exists a palpable unease surrounding the technology. Approximately one-third of generative AI users express concerns regarding job displacement.
“Much of the apprehensive sentiment emanates directly from industry leaders,” PYMNTS noted last month. “In May, Sam Altman, CEO of OpenAI, informed a congressional hearing that AI could potentially displace up to 70% of all jobs.”
Additionally, during that same month, Dario Amodei, head of AI company Anthropic, conveyed to Axios that the technology might eradicate half of all entry-level white-collar positions, leading to unemployment rates soaring between 10-20% within the next one to five years.
The BofA report also evaluates the ramifications of AI on smaller enterprises, discovering that payments from these businesses to technological services surged by nearly 7% year-over-year in September, a trend predominantly driven by the manufacturing and construction sectors.
“Small enterprises continue to emphasize technology investments, notwithstanding the prevailing economic uncertainties,” the report concludes. “This indicates that the integration of AI-enhanced productivity tools is expanding across various industries.”
Source link: Pymnts.com.
