Wendy’s ordering kiosks. Ben & Jerry’s grocery store freezers. Abercrombie & Fitch’s marketing. Many mainstays of the American customer experience are increasinglypowered by artificial intelligence.
The question is whether the technology will actually make companies more efficient.
Rapid productivity improvement is the dream for both companies and economic policymakers. If output per hour holds steady, firms must either sacrifice profits or raise prices to pay for wage increases or investment projects. But when firms figure out how to produce more per working hour, it means that they can maintain or expand profits even as they pay or invest more. Economies experiencing productivity booms can experience rapid wage gains and quick growth without as much risk of rapid inflation.
But many economists and officials seem dubious that A.I. — especially generative A.I., which is still in its infancy — has spread enough to show up in productivity data already.
Jerome H. Powell, the Federal Reserve chair, recently suggested that A.I. “may” have the potential to increase productivity growth, “but probably not in the short run.” John C. Williams, president of the New York Fed, has made similar remarks, specifically citing the work of the Northwestern University economist Robert Gordon.
Mr. Gordon has argued that new technologies in recent years, while important, have probably not been transformative enough to give a lasting lift to productivity growth.
“The enthusiasm about large language models and ChatGPT has gone a bit overboard,” he said in an interview.
