Egan-Jones Examines How Artificial Intelligence May Reshape Economic Outcomes

NEW YORK–(BUSINESS WIRE)–Egan-Jones released an analysis exploring how the future impact of artificial intelligence may differ significantly from common expectations. The commentary notes that while AI is often portrayed as eliminating work and ushering in broad prosperity, Egan-Jones holds a different view on how gains from AI adoption are likely to be distributed.

The article observes that AI capabilities are frequently cited as surpassing human performance in areas such as legal exams, medical image interpretation, and software development. However, it cautions that expectations of widespread leisure and universal income may be misplaced, stating that AI beneficiaries may not share gains broadly, potentially leading to significant economic dislocations.

The commentary discusses how AI driven automation is already affecting factories, warehouses, transportation, and other sectors, with the likely result being higher productivity and GDP. It raises concerns about the reallocation of displaced workers, particularly as job losses may outpace population declines in developed economies, increasing pressure on labor markets and social systems.

Egan-Jones also addresses the impact of AI on competitive dynamics, noting that reduced barriers to entry could challenge established firms. The article references declining equity performance in certain technology companies as investors anticipate that AI will make it easier to develop competing platforms. It further highlights efforts to build AI led software development tools designed to displace legacy providers through faster, better, and cheaper solutions.

On open-source AI, the commentary explains that while some components are openly available, large portions of the ecosystem remain proprietary. As a result, the wealth generated by AI is unlikely to be broadly distributed, particularly given the scale of investment and expected returns in the sector.

The article concludes that AI is already changing society and emphasizes the importance for investors and risk managers to anticipate these shifts and adjust positioning accordingly.

About Egan-Jones Ratings

Egan-Jones, an NRSRO founded in 1995, offers timely and accurate credit ratings and proxy services.

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