Despite AI's narrative as a labor-replacement technology, NVIDIA's booming chip sales are occurring alongside strong job growth. This suggests that, for now, AI is acting as a productivity tool that is creating economic expansion and new roles faster than it is causing net job destruction.

Economic analysis controlling for business cycles reveals a small but measurable increase in unemployment for roles with high AI exposure. This suggests AI's labor market disruption is not just a future possibility but a current, albeit modest, reality.

AI will primarily threaten purely cognitive jobs, but roles combining thought with physical dexterity—like master electricians or plumbers—will thrive. The AI-driven infrastructure boom is increasing demand and pushing their salaries above even those of some Silicon Valley engineers.

A stark divide exists between the "AI economy," growing at 31%, and the rest, which is nearly flat. Despite this, the broader U.S. job market remains surprisingly strong, with sectors like retail and healthcare adding jobs. This indicates the AI boom's economic impact is highly concentrated and traditional sectors are currently holding up employment numbers.

While AI causes job losses in sectors like Information, it simultaneously drives significant job creation. Demand-side effects, including data center construction and wealth effects from AI stocks boosting spending, currently create more jobs than AI displaces, resulting in a net positive impact.

Economists who historically dismissed AI's threat to employment are beginning to shift their stance, according to the New York Times. The long-held view that technology always creates more jobs than it destroys is now being questioned in light of AI's unique, cognitive-automation capabilities.

The initial job creation from AI isn't just for software engineers. It's driving a massive boom in physical infrastructure like data centers and chip fabs, creating high demand for skilled trades like electricians, plumbers, and construction workers.

The impact of AI on the labor market is becoming clear in job openings data. There is a significant crash in "professional and business services"—administrative and middle-management roles that are easily automated. Meanwhile, jobs requiring physical or highly specialized skills remain robust.

The US economy is currently experiencing near-zero job growth despite typical 2% productivity gains. A significant increase in productivity driven by AI, without a corresponding surge in economic output, could paradoxically lead to outright job losses. This creates a scenario where positive productivity news could have negative employment consequences.