A key concern for El-Erian is the inadequate focus on diffusion—the process of getting AI into the workplace in a comprehensive and orderly manner. The U.S. currently lacks a comprehensive diffusion policy, unlike countries such as China and the UAE. If diffusion is not handled correctly, he added, the full promise of AI won’t be realized.
Regarding corporate adoption, El-Erian noted his concern about the prevailing corporate mindset, which currently views AI primarily as a “cost minimizer.” The true potential of AI, he argued, lies in labor enhancement and serving as a “productivity enabler.” If the U.S. gets diffusion right, the resulting significant productivity increase could allow monetary policy to be looser than it would otherwise have been.
El-Erian cautioned that this pressure is not isolated: lower household incomes may be forced to stop spending because they are unable to, and this “will contaminate upwards for the economy as a whole.” While the upper class is generally doing well on both income and wealth measures, they are not immune to the difficulties faced by low-income households.
El-Erian urged policymakers to recognize that the future will be determined by the “tails of distribution, not in the belly.” In today’s structurally changing, fragmented world, leaders must realize they are operating in a multimodal world and should not be deceived by the assumption of a normal, bell-shaped distribution.
For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.
