Federal Reserve Chair says AI is a paradigm shift that will likely benefit U.S. economy

Federal Reserve Chair Kevin Warsh said artificial intelligence represents a paradigm shift that will likely make the United States a big winner in the medium term. Warsh made the comments on Wednesday at a conference organized by the European Central Bank in Sintra, Portugal. He described the current stage of AI development as the first or second inning of a revolution.

AI's economic effects Warsh said the technology could create jobs and boost productivity. He added that prosperity will be stronger as a result. Business investment in AI has contributed to recent U.S. economic growth, according to some studies. A surge of AI spending accounted for roughly two-thirds of gross domestic product growth over the first half of 2025, JPMorgan Asset Management found.

Market performance and future outlook Shares of AI chipmakers have contributed to stock market gains this year. Micron has risen 265 percent in value this year, while Sandisk has climbed 750 percent over the same period. Warsh said he expects business surveys to reflect a more positive view of AI within six months. He noted that current surveys may understate the technology's eventual impact.