The full economic impact of AI is constrained by the physical build-out of data centers. With only a quarter of the projected $3 trillion in necessary infrastructure capex deployed through 2028, widespread adoption and its labor market effects will be gradual, not instantaneous.
The potential rise in unemployment from AI will not happen in a vacuum. Central banks and governments are expected to use tools like interest rate cuts, unemployment benefits, and targeted spending to stimulate the economy, thereby shortening and reducing the severity of any labor disruption.
Initial data from industries with high AI exposure shows productivity gains are driven by increased output, not reduced labor hours. This counters the common narrative that AI's primary effect will be immediate, widespread job displacement, suggesting a period of augmentation precedes automation.