exactly makes these machines merit the label of “ artificial intelligence ”? information systems with ai exploit complex patterns recognized in vast unstructured data sets to mimic human creativity, problem solving, and critical thinking. some forms of ai — prediction of customer tastes with machine learning, for example — are already employed in the business sector. others are still emerging, especially generative ai — programs that create new text and images in response to prompts. applications in software creation, customer service, and marketing are already with us. but the full scope of generative ai ’ s application will be revealed slowly as firms experiment and innovate. this subject bears careful research and understanding in my role as a monetary policymaker. the federal reserve ’ s dual mandate is to promote maximum employment and stable prices. as i discussed in a recent speech at the ohio state university, the spread of ai and other technologies could have an effect on both. 3 see lisa d. cook ( 2023 ), “ generative ai, productivity, the labor market, and choice behavior, ” speech delivered at the national bureau of economic research economics of artificial intelligence conference, fall 2023, toronto, september 22, https : / / www. federalreserve. gov / newsevents / speech / cook20230922a. htm. see lisa d. cook ( 2024 ), “ what will artificial intelligence mean for america ’ s workers? ” speech delivered at the ohio state university, columbus, ohio, september 26, https : / / www. federalreserve. gov / newsevents / speech / cook20240926a. htm. - 3artificial intelligence adoption on the rise let me say from the outset that there is tremendous uncertainty about ai ’ s implications. we still do not know what the magnitude or intensity of these effects will be, which workers and firms will be most affected, how big the increase in productivity might be, or even the period over which these effects will be realized. while much is still to be learned, i see growing evidence that ai is poised to have a substantial effect on u. s. and global labor markets. as firms deploy these technologies and workers discover ways to make use of them, such developments can create the conditions for greater productivity and thus higher wage growth consistent with stable prices. and adjustments in the labor market that follow as the economy adapts to technical change can affect maximum employment. my view is that ai, and genera

##tive ai in particular, is likely to become a generalpurpose technology — one that spreads throughout the economy, sparks downstream innovation, and continues to improve over time. since my speech last year, further evidence in favor of a cautiously optimistic view has accumulated. the list of tasks for which ai performance is at least equivalent to that of a skilled human continues to grow. remarkably, one ai model reached silver - medal performance at the international mathematical olympiad this year. 4 survey results from the census bureau show that ai adoption has risen, with ai in regular use across many sectors of the economy, but is still see nestor maslej, loredana fattorini, raymond perrault, vanessa parli, anka reuel, erik brynjolfsson, john etchemendy, katrina ligett, terah lyons, james manyika, juan carlos niebles, yoav shoham, russell wald, and jack clark ( 2024 ), artificial intelligence index report 2024 ( stanford, calif. : stanford university, institute for human - centered ai, ai index steering committee, april ), https : / / aiindex. stanford. edu / wp - content / uploads / 2024 / 04 / hai _ 2024 _ ai - index - report. pdf ; and manon bischoff ( 2024 ), “ ai reaches silver - medal level at this year ’ s math olympiad, ” scientific american, august 6. - 4used in only a small share of firms. 5 other surveys find wider adoption. for example, a study from the federal reserve bank of st. louis found generative ai is being adopted at a faster rate than the internet and personal computers were at a comparable point after those technologies were widely introduced. 6 in a sign that the prospect of more widespread use of ai is on the horizon, u. s. data center construction spending and semiconductor imports have soared in the past two years. examining productivity since the high - tech boom ended in the early 2000s, smoothing through recessiondriven swings, growth in output per hour worked has been relatively modest, roughly 1. 5 percent per year, on average, though it has picked up some over the past two years. in fact, the latest estimate for productivity would not have looked out of place in the hightech boom : it grew 2. 7 percent over the year ending in the second quarter. the emergence of generative ai has raised hopes for a technology -