Gen AI and the racial wealth gap

Generative AI (gen AI) has the potential to create value for companies and generate wealth for workers. The technology could also widen racial economic gaps, according to senior partner Mark McMillan and colleagues. For example, by 2045, gen AI could boost household wealth in the United States by nearly $500 billion. But, because Black Americans capture only about 38 cents of every dollar of new household wealth, there’s a scenario where gen AI could increase the wealth gap between Black and White households by $43 billion annually.

By 2045, skewed distribution of annual gen AI wealth creation could cost Black households in the United States $43 billion each year.

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A graphic displays the share of wealth created by generative AI (gen AI) in the US and the potential share gained by Black households under 2 scenarios and the difference, or gap, between them. Overall, ~$500 billion is expected to be generated by 2045 by gen AI. If Black households were to gain gen AI–created wealth at the same rate as the average US household by that year, Black households would see ~$70 billion. If Black households were to accrue wealth from gen AI at a rate proportional to current Black representation of total wealth in the US, that amount would be $27 billion, resulting in a wealth gap of $43 billion.

Source: FRED, Federal Reserve Bank of St. Louis; “Wealth inequality and the racial wealth gap,” US Federal Reserve, Oct 22, 2021; Table HH-3, US Census Bureau; “The economic potential of generative AI: The next productivity frontier,” McKinsey, Jan 14, 2023.

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To read the article, see “The impact of generative AI on Black communities,” December 19, 2023.