What more can be said about artificial intelligence?It's viewed as a game changer and the next tech revolution, sparking visions of a future where AI assistants handle all our tasks. However, economist Caleb Maresca from New York University presents a contrary perspective in a study suggesting that merely anticipating transformative AI could negatively impact the economy by driving down wages and increasing interest rates dramatically. Maresca's research explores potential timelines for AI's ability to automate jobs, revealing that expectations of such advancements can significantly influence current economic conditions even before any breakthroughs are realized. The scenario he sketches predicts that a widespread belief in AI's cost-cutting potential could lead to a rise in interest rates—potentially by 10-16%—making it more expensive to start businesses or buy homes, which could result in increased saving and reduced spending, contrary to what fuels economic growth. While the extent of future job automation by AI remains uncertain, the study assumes large corporations will seize any opportunity to reduce labor costs, which aligns with the goals of AI development.

Prominent figures like Sam Altman, Sebastian Siemiatkowski, and Elon Musk have recently promoted the idea of AI replacing traditional jobs, but Maresca cautions that when jobs are automated, the wage savings do not benefit the broader economy. Instead, they accumulate with those who control the AI technologies. Maresca warns that this might create significant economic disparities, potentially mirroring situations like Russia, where wealth is concentrated in the hands of a small elite. He underscores the importance of advocating for policies that ensure the wealth generated by transformative AI is shared more equitably, especially if unemployment rates remain high. To prepare for this uncertain future, Maresca advises individuals to consider the increased significance of traditional capital and the potential depreciation of human capital, which could represent a substantial financial setback for many. Ultimately, he emphasizes that the realization of an ideal AI future depends on the societal frameworks we establish now, highlighting the urgent need to address existing inequities.