Federal Reserve Governor Michael Barr says the economic impact of artificial intelligence will depend partly on whether it increases market concentration or competition. Gains could be captured by a handful of dominant companies with immense computing capacity and capital, or spread more widely as smaller businesses adopt AI and pass benefits on to customers and workers. In 2024, about 75% of large companies were using generative AI, compared with a high single-digit adoption rate among smaller businesses. Barr says regulatory frameworks and competition policy will help determine how those benefits are distributed. He has also highlighted risks involving market volatility, herding, lending bias and possible inflationary pressure around data centers, for which global investment is expected to reach about $3 trillion.
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