Artificial intelligence: how is it changing the game?

The rise of artificial intelligence (AI) is reshaping how we think about productivity, work and, possibly, inflation. In our 2021 strategy review, we noted that digitalisation could reduce price pressures, both directly, as technology gets cheaper, and indirectly, because it changes the way markets work.

Since then, the pace of digitalisation has picked up, especially with the emergence of generative AI. While the buzz about the new technologies is loud and they are being hailed as a game-changer, AI is not yet very widely used. It is still not clear what all of this means for the economy and for inflation. Will AI boost productivity and pull down prices? Or will it trigger higher wages and boost demand, and therefore drive up prices?

The chessboard is set, but the outcome of the game is still to be seen.