What impact will AI have on jobs and the economy? (with Anton Korinek)

Artificial intelligence represents a transformative economic shift comparable to, or potentially exceeding, the Industrial Revolution. By substituting for human labor, AI threatens to shrink the labor share of the economy while significantly increasing the capital share, potentially triggering a growth explosion through recursive self-improvement. While GDP per capita will likely rise, the transition risks creating severe inequality, job displacement, and aggregate demand shortfalls if not managed effectively. Although historical economic models suggest a gradual adoption, the rapid trajectory of AI capabilities challenges traditional predictions. The ultimate impact depends on whether AI remains a complementary tool that enhances human productivity or evolves into a disruptive force that renders current labor roles obsolete. Navigating this shift requires reevaluating tax structures—moving from labor-based to capital-based taxation—and addressing the profound societal and ethical implications of a world where machines perform tasks previously reserved for human intelligence.