Part II — A Transformative Shock – AI: The Mine, the Chip, the Entrepreneur

Artificial intelligence is poised to reshape societies. The countries that produce the components essential to AI and those that are investing heavily in the field – led by the United States and China – will be the big winners. This surge of investment fuels strong momentum in start-up creation and drives a profound transformation of the labour market, ushering in a new cycle of productivity growth. The impact of AI on inflation is mixed: in the short term, it creates pressure on prices due to its needs in tech components and energy; in the medium term, AI should, like any major innovation, become disinflationary.

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Definition :

AI-enabling goods: Defined according to the WTO nomenclature, these include raw materials, chemicals, equipment, semiconductors and other electrical and electronic materials used in AI, as well as those ‘likely to be used’ in AI (and therefore potentially in other applications too).

The Jevons effect: An improvement in the efficiency of a resource’s use does not reduce its overall consumption but may, on the contrary, increase it (the Jevons paradox, formulated by the economist William Jevons in the 19th century).