Will AI Adoption Actually Pay Off?
BlackRock portfolio manager Michael Gates discusses the potential impact of artificial intelligence on productivity and the labor market, stating that AI-driven productivity gains may not automatically translate into profits. Gates notes that a productivity-led growth impulse is positive for real GDP and negative for inflation.
BlackRock's Michael Gates discusses AI's impact on the economy. Gates believes the US is entering a period of sustained productivity growth, partly driven by AI. Productivity-led growth is positive for real GDP and negative for inflation, making it a positive environment for stocks. Gates notes that AI adoption doesn't automatically translate into profits, as the labor market's elasticity to GDP growth is reducing. If productivity growth drives GDP up substantially, it can offset the drop in labor intensity, sustaining overall job creation. Gates is cautiously optimistic about the market outlook, citing tight credit spreads in fixed income as a concern.
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