AI’s Overlooked $97 Billion Contribution to the Economy

The AI ‘dividend’ may not be evident yet in estimates of gross domestic product but it’s making life better and more productive

By Avinash Collis and Erik Brynjolfsson. Mr. Collis is a professor at Carnegie Mellon University and Mr. Brynjolfsson is a professor at Stanford. Excerpts:

"Americans already enjoyed roughly $97 billion in “consumer surplus” from generative AI tools in 2024 alone. Consumer surplus—the difference between the maximum a consumer is willing to pay for a good or service and its actual price—is a more direct measure of economic well-being than GDP."

"ChatGPT reached 100 million users in two months, yet productivity still behaves as if it were 2015—when the AI chatbot didn’t even exist."

"Translating a flashy demo into organization-wide workflows requires new software, retraining and—most crucially—an overhaul of management practices. In the short run, many firms pay twice: first for the AI software and then for employees to learn how to use it. Payoffs often come later"

"When a consumer takes advantage of a free-tier chatbot or image generator, no market transaction occurs, so the benefits that users derive—saving an hour drafting a brief, automating a birthday-party invitation, tutoring a child in algebra—don’t get tallied."

"Rather than asking what people pay for a good, we ask what they would need to be paid to give it up."

"William Nordhaus calculated that, in the 20th century, 97% of welfare gains from major innovations accrued to consumers, not firms."

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