Artificial Intelligence and the Great Divergence

This report by the Council of Economic Advisers examines the economic impact of artificial intelligence and its potential to create a new global economic divergence. It compares the AI revolution with the Industrial Revolution and analyzes how AI may influence GDP growth, productivity, labor markets, investment, infrastructure, business adoption, and international competitiveness. The report reviews estimates of AI’s effect on GDP, discusses total factor productivity, employment impacts, Jevons’ Paradox, AI investment, model performance, falling AI usage costs, AI company revenues, business usage, critical minerals, and data center energy demand. It also compares countries across AI investment, performance, and adoption, showing the United States as a leading country in many AI indicators, followed by China and the European Union. This document is useful for studying AI economics, digital transformation, macroeconomic growth, technology policy, labor market change, and global AI competition.