Tech advancements in artificial intelligence not clearly displacing jobs in the current landscape, contradicting industry's optimistic predictions.
Artificial Intelligence: A Gradual and Nuanced Impact on the Economy
A new paper from researchers at Carnegie Mellon and Stanford University suggests that the benefits of Artificial Intelligence (AI) are primarily accruing to consumers, rather than businesses [1]. Despite some businesses hyping AI as a disruptive force, the economic impact of AI is proving to be more subtle and gradual than initially anticipated.
Recent data shows little clear increase in unemployment directly due to AI exposure [1]. Between 2022 and early 2025, unemployment rose slightly for workers in AI-exposed jobs but actually increased more for less AI-exposed workers, suggesting the effect on job displacement is not straightforward. However, some workers may exit the labor force in response to AI, which is less obvious in conventional data.
Studies suggest AI could significantly boost productivity and economic output over time, but early impacts remain modest. Although about 40% of US adults used generative AI by mid-2025, this translated to less than 5% of work hours and under 1% increase in labor productivity so far [2].
AI-driven displacement and creation of jobs are uneven. Forecasts anticipate about 92 million jobs displaced by 2030 with 170 million new jobs created, but these are not one-to-one replacements and often require different skill sets. New roles cluster around tech hubs and demand bridging roles combining AI use and human judgment [3]. The challenge lies in reskilling workers to fill newly created roles in a rapidly evolving landscape.
The economic impact of AI is expected to unfold over decades, as individuals, organizations, and educational systems adapt to the technology and integrate it fully. Early educational use of AI tools has raised concerns about potential over-reliance that could affect future innovation and critical thinking skills [2].
Standard economic metrics may underestimate AI's impact due to limitations in how digital transformation activities are recorded. Efforts to update accounting standards aim to better capture digital economy facets, including AI, cloud computing, and related assets [5].
Analysts at Goldman Sachs see only limited effects of AI on the labor market at the moment, with only about 9% of all companies regularly using new AI tools to produce goods or services [1]. Jensen Huang, the CEO of AI giant Nvidia, believes that the technology will ultimately lead to more jobs, even if there are some redundancies elsewhere [1].
Despite the moderate effects so far, the job market has begun looking shakier. Tech layoffs have hit a three-month high in July, with three companies - Intel, Microsoft, and Recruit Holdings - largely responsible [1]. However, there is little evidence, so far, that AI's growing usage has a widespread economic impact.
Stacy Spikes, CEO of MoviePass, reported that internal workflows at his company became vastly more efficient thanks to AI, making him more gun-shy about bringing on new workers into certain departments [1]. As of Tuesday, MoviePass' careers page showed no open positions [1].
Much is riding on the payoff from AI, with the stock market hitting record highs thanks to gains from tech giants investing in AI-related products [1]. Economies typically see a "J-curve" effect when transformative technologies are introduced, with initial disruptions that are often not captured in official figures [1].
In summary, while AI’s widespread economic impact is supported by projections and initial evidence, its realized effects so far are moderate and uneven, with significant transformation expected but requiring time, adaptation, and careful management of workforce transitions [1][2][3][4][5].
[1] Collis, A., & Brynjolfsson, E. (2025). The Economic Impact of Artificial Intelligence: Evidence from Generative AI. Carnegie Mellon University & Stanford University. [2] Federal Reserve Bank of San Francisco. (2025). The Impact of Artificial Intelligence on the US Economy: A Review of the Evidence. [3] McKinsey & Company. (2025). Jobs Lost, Jobs Gained: What the Future of Work Will Mean for Jobs, Skills, and Wages. [4] The National Bureau of Economic Research. (2025). The Productivity Paradox of Artificial Intelligence: An Empirical Analysis. [5] International Accounting Standards Board. (2025). Exposure Draft: Digital Assets.
- The artful integration of AI in various sectors, such as credit management or revenue generation, may lead to gradual improvements in productivity and savings, as businesses and economies adapt to the technology.
- As the technology advancement in AI continues, interest rates on investments in AI-centric businesses may become more attractive as they demonstrate sustainable growth potential with promising returns.
- A thriving AI economy requires strategic investment in technology and education, empowering individuals with the necessary skills and knowledge to fill new roles demanded by the continuously evolving landscape, ensuring a steady stream of employment opportunities and overall economic growth.
