Optimism vs. Pessimism: Steering Through AI’s New Economic Landscape

SAN FRANCISCO — In June 2025, Meta was criticized by OpenAI for luring away top talent with $100 million offers, spotlighting the intensifying AI talent war. Meanwhile, the current CEO of Amazon, Andy Jassy, announced AI-driven job cuts, and Microsoft partnered with Google DeepMind on AI supercomputing. These moves highlight the growing tension between the promise and risks of AI. 

Figure 1. Zuckerberg is optimistic on Meta’s AI ambitions (Source: Reuters)

Pessimists Warn: AI Hype Is Dangerously Divorced from Reality

Brynjolfsson et al. (2020) noted that although General Purpose Technology (GPT) industries have attracted massive investment thanks to technological breakthroughs, measured productivity growth in the U.S. has halved over the past decade. In addition, many workers remain deeply concerned about their livelihoods due to stagnant wages. For most Americans, real income has barely increased since the late 1990s. Other major economies are also facing similar challenges.

Figure 2. Regionally Smoothed Annual Average Labor Productivity Growth Rate (Percentage) (Source: The Conference Board Total Economy Database)

According to data from the Center for Global Development (CGDEV), the economic benefits of AI are largely concentrated among high-income groups and advanced regions, while low-skilled workers and developing countries reap minimal gains. CGDEV predicts that AI is unlikely to generate significant employment in low-skill sectors, which may in turn worsen social inequality. As a result, wealth inequality is likely to widen rapidly although wage gaps might narrow.

Optimists Counter: It's Normal Not to See Growth While Sowing for the Future

In response to growing concerns that the AI boom is becoming disconnected from real-world economic outcomes, optimistic economists argue that AI’s displacement risk is lower than often imagined. 

Hampole et al. (2025) find that task‑related skill demand falls by only 4.5% directly. This modest reduction reflects the fact that AI‑driven boosts to sales, profits, and total factor productivity lead firms to relocate employees’ tasks to capture additional revenue. Such productivity spillovers, in turn, weaken firms’ incentive to substitute labor. Their research finds that high-paying jobs are often more susceptible to automation than low-paying ones because most high-paying jobs are offered by large companies with greater financial resources to implement automation. AI does have the potential to narrow income inequality.

Besides, according to the “Productivity J-Curve” theory, transformative GPT often exhibits significant lag effects. It means their true economic value may take years, even decades, to materialize. Just as electricity and computers once faced prolonged delays between breakthrough and widespread adoption, AI is now building the groundwork for the next wave of industrial transformation through key advances in image recognition and predictive analytics.

Figure 3. The Productivity  Mismeasurement J-Curve (Growth) (Source: The Productivity J-Curve: How intangibles complement General Purpose Technologies)

Global venture capital investment in AI surpassed $60 billion in the first half of 2025, marking a record high. The market’s continued confidence in the intangible value of AI-driven companies further reflects the growing convergence between AI and the real economy.

In an interview with Ge Qiyu, a graduate student specializing in artificial intelligence at the University of Chinese Academy of Sciences, said that “The true value of AI lies not in replacing humans, but in forming highly efficient complementarities with human labor. This kind of ‘complementary innovation’ is important to driving overall productivity gains.” 

Figure 4. AI empowers human intelligence (Source: Pinterest)

A 2024 report by the G7 also echoed this view, noting that as AI technologies mature and costs decline, a growing number of small and medium-sized enterprises (SMEs) will gain access to meaningful opportunities for transformation. There is no need to be overly concerned about the current lag in statistical indicators. It is during this “lag phase” that critical groundwork—such as infrastructure development, talent cultivation, and business model experimentation—is taking place. Once the benefits of AI begin to materialize, a new wave of economic growth is likely to follow. 

All the efforts made today in sowing the seeds for the future will yield visible and tangible returns.

Bridging the Divide: A To-Do List for All Stakeholders

Optimism and pessimism are not opposites, but two perspectives in the current structural transformation. While pessimists warn of tech monopolies and social imbalance, optimists admire AI’s long-term potential for broad diffusion. Real progress depends on how we can mobilize complementary resources through innovative ways such as upskilling workers, redesigning workflows, and strengthening institutional support.

Governments should expand digital literacy and foster partnerships with enterprises to prevent “technological feudalism” and ensure equitable distribution of AI benefits.

Throughout history, every technological revolution has brought benefits that GDP alone could not capture. Statistical tools must be updated to fully understand the true impact of AI in the years ahead. This will be a key mission for economists, who also need to work alongside governments and technologists to develop effective regulatory frameworks.

Industries should assess AI suitability across roles, invest in reskilling, and redesign operations to integrate human–AI collaboration. Individuals must remain optimistic and actively learn AI-powered tools to stay relevant in the future economy.

The Long Dawn of Intelligence: Rising Through the AI Transition

AI’s economic benefits won’t appear automatically. They depend on our resilience during the slow phases and our determination to adapt the relations of production in time.

If the release of breakthrough GPTs and the normalization of AI regulatory summits become a reality, that day will mark a pivotal moment in testing whether optimistic dreams can truly be fulfilled.