'Revolution': Fed Chair Kevin Warsh says US likely 'big winner' in AI race
Federal Reserve Chair Kevin Warsh on Wednesday voiced optimism about artificial intelligence, describing the technology as a "paradigm shift" that would likely make the United States a "big winner in the medium-term."
"We are in the first or second inning of this revolution," Warsh said in Sintra, Portugal, at a conference organized by the European Central Bank.
Warsh, who took the helm of the Fed last month, weighed in on the bullish side of an ongoing debate among policymakers, investors and the general public about the potential impact of AI on the labor market and wider economy.
The technology could create jobs and boost productivity, strengthening the economy of the U.S. and other nations, according to Warsh.
"This is a big paradigm shift both for the conduct of our policy and for our economies," Warsh said. "I think the jobs will be greater. Prosperity will be stronger."
Business investment in AI has helped drive recent U.S. economic growth, some studies show.
A surge of AI spending accounted for roughly two-thirds of gross domestic product growth over the first half of 2025, JPMorgan Asset Management found, outpacing the contribution made by hundreds of millions of U.S. consumers. Many of the nation's largest companies have poured funds into the chips and data centers necessary to operate AI.
AI chipmakers, meanwhile, have helped deliver stock market gains this year, allowing the major indexes to overcome a lackluster stretch for many of the tech giants that previously lifted markets.
Shares of fast-rising AI chipmakers have boosted major indexes. Micron has soared 265% in value this year. Sandisk has climbed a staggering 750% over that period.
For now, however, AI has failed to achieve gains on a scale near its immense costs, some analysts previously told ABC News. A product like AI would typically generate revenue in the form of sales either direct to consumers or to third-party businesses using the technology to enhance their offerings. AI has faced challenges on both fronts, some analysts said.
Speaking on Wednesday, Warsh signaled that he expects a shift in sentiment among businesses regarding the impact of AI.
"While we might see business surveys that say 'no big deal,' my speculation is six months from now the surveys will be saying quite the opposite," Warsh said.
