AI Productivity Gains Can Solve Inflation - BlackRock
(15 June 2023 – United States) New artificial intelligence (AI) technologies can help end record inflation according to the head of the world’s largest asset manager, BlackRock CEO Larry Fink.
A global slowdown in productivity is the primary reason why we have such high inflation, Fink asserts, warning inflation was “still too strong, too sticky” and would lead to two to four more interest rate hikes from the US Federal Reserve. The Fed held off on raising rates this week but forecast two more increases before the end of 2023.
Corporates are pinning their hopes on generative AI automating significant volumes of knowledge work. This includes tools such as OpenAI’s chatbot “ChatGPT”.
The new technology could add anywhere between US$2.6 trillion to US$4.2 trillion to the global economy, McKinsey Global Institute estimates in a report. AI could automate work activities that absorb 60 percent to 70 percent of employees’ time today and in turn grow labour productivity by between 0.2 percent and 3.3 percent each year.
“AI has the huge potential to increase productivity, and transform margins across sectors which would bring down the inflation” Fink commented.
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