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Will Artificial Intelligence Do More Harm Than Good for U.S. Growth?


AI investments have contributed meaningfully to U.S. economic growth, but investors could find this financial boon is a double-edged sword next year when it brings greater job cuts.

Chipmaker Nvidia and the top tech hyperscalers—large service providers offering scalable AI infrastructure like Amazon, Alphabet (parent of Google), Meta, Microsoft—have collectively gained over $10.3 trillion in market value since the fourth quarter of 2022. As the COVID-19 pandemic and Russia’s invasion of Ukraine contributed to sharply rising inflation, the Fed reacted with an historically aggressive monetary tightening cycle, hiking policy rates by 5 percentage points between March 2022 and July 2023. The proposed aftermath of broad AI adoption ranges from productivity booms that leave large swaths of the population out of work, to incremental innovation and role augmentation, to the stuff of dark sci-fi movies.

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