The article titled "Why it is too soon to call the hype on AI’s productivity promise" (which matches the content of the article requested, despite the slight headline variation in the prompt) argues against both extreme optimism and pessimism regarding AI's impact. While some optimists predict a "glorious new era of radical abundance," and some pessimists foresee human extinction, the author suggests that both are likely to be incorrect. The more certain prediction is that most forecasts will be exaggerated.
AI is characterized as the latest general-purpose technology, akin to electricity, computers, or the internet, capable of improving numerous functions and automating routine operations more efficiently. Arkady Volozh, founder of Nebius, describes AI as a "magic powder that can be used to improve everything." Just as the Industrial Revolution magnified physical strength, AI is seen as magnifying cognitive ability.
However, the article cautions that the journey to widespread productivity gains from general-purpose technologies can be slow. Historically, technologies like railways and electricity took decades to significantly boost productivity due to the need for new infrastructure, adoption of new working methods, and the launch of new products and services. In the interim, adopting new technologies can even temporarily decrease productivity as companies and employees adapt, sometimes leading to an increase in unproductive tasks, a phenomenon economists describe as a J-curve.
Economists Erik Brynjolfsson, Daniel Rock, and Chad Syverson highlight that general-purpose technologies like AI necessitate substantial complementary investments, including the co-invention of new processes, products, business models, and human capital. These investments are often poorly reflected in official economic statistics and require considerable time before they manifest as higher productivity growth.
