We’re still figuring out how AI will move through the economy, says OpenAI’s chief economist – Crypto News

“Some Nobel Prize-winning economists estimate AI’s impact on GDP in the low single digits, while others expect double-digit growth. That’s how uncertain things are,” Chatterji told Mint in an interview during his India visit on Tuesday.

The effect of AI on jobs is similarly debated. “Some studies suggest AI will affect only a small fraction of jobs, while others say up to 80% of job tasks could change. We’re still figuring out how AI will move through the economy.” However, Chatterji is optimistic. “I’ve spent time with the people building these models, and the speed of progress is incredible. What we could do a year ago is very different from what we can do today—and in just two months, the advancements have been astonishing.”

The AI Revolution

AI adoption is accelerating rapidly. “The capabilities of these models are improving so fast that the economic impact will likely be magnified,” Chatterji said. “Economists will need to conduct studies, run A/B tests (comparing the outcomes of two different choices—A and B—with a pilot), and interview workers to fully understand AI’s effects,” he said. “Eventually, we’ll get precise numbers, but right now, we’re still in discovery mode.”

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Chatterji agreed that AI’s pace of change is much faster than that of previous technological revolutions. “With semiconductors, there was about a 10-year gap between the invention of the integrated circuit and its widespread use. AI won’t give us that much time. Businesses, governments, and civil society need to get ready now.”

Chatterji was in India to learn about its AI ecosystem and explore opportunities for collaboration. He met with government officials, business leaders, and civil society representatives, gaining a comprehensive view of how AI is shaping different sectors.

India is not just a major user of AI but also a key contributor. It’s our number two market for weekly active users, and people here are building things that aren’t being done anywhere else in the world.

“Traveling globally helps us understand how different regions are adapting. The reason I came is to learn, as much as I can, from what’s going on in India and inform our efforts at OpenAI. And when you learn, you can also build together. India is not just a major user of AI but also a key contributor. It’s our number two market for weekly active users, and people here are building things that aren’t being done anywhere else in the world,” he said.

A major topic of discussion was India’s AI infrastructure investments, particularly efforts to build a strong backbone for AI development. “We’re laying the foundation for building together in the future, and I hope to keep coming back,” said Chatterji, who sees AI as an incredible opportunity despite the challenges. “The best time to start planning is now. We need to manage risks and support people through these transitions.”

On the economic front, AI will reshape job markets. While automation may displace some roles, it will also create new opportunities, much like past technological shifts. The challenge lies in ensuring widespread access to AI tools and upskilling workers to utilize them effectively, according to Chatterji. Governments and organizations must collaborate to manage these transitions smoothly.

Chatterji also believes India has a significant opportunity in AI and technology, thanks to its young and skilled workforce. With over a million STEM graduates annually and a large under-30 population for the next 30 years, India is well-positioned to adapt to technological advancements. He pointed out that young professionals have the flexibility to acquire new skills, making reskilling a critical focus for the country’s future workforce.

But when asked about the idea of a universal basic income to help assist those whose jobs are displaced, Chatterji said it in a lighter vein: “Hey, no, not me. I have enough stuff on my plate already.”

Beyond economic policies, Chatterji said India’s potential lies in its education system. Preparing students for AI-driven industries requires a balance of foundational knowledge and critical thinking. “AI, like calculators in math education, can assist but not replace fundamental learning. Understanding subjects deeply will enable students to leverage AI for innovation, such as in drug discovery and complex problem-solving,” he added.

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Chatterji acknowledged that the Indian government is making significant investments in AI infrastructure and readiness. AI-powered solutions can improve service delivery, especially for individuals facing language barriers or bureaucratic complexities. AI can help farmers access information on subsidies or assist citizens in navigating government programs more efficiently.

Consider these examples. Digital Green, in partnership with OpenAI, has developed Farmer.Chat, an AI-powered tool that helps farmers access personalized agricultural advice instantly. This supports extension programmes in India, Kenya, and beyond, where agent-to-farmer ratios can be as high as 1:650. Over 15 years, Digital Green has created 8,000+ training videos in 50+ languages, increasing farmer incomes by 24%. Vahan.ai, which connects job seekers with potential opportunities and employers with candidates, uses OpenAI’s large language model (LLM) GPT-4o, along with speech-to-text and text-to-speech services.

Additionally, India’s commitment to digital infrastructure, such as the unified payment interface (UPI) and open data initiatives, enhances AI applications in governance and public services, according to Chatterji.

Chatterji is a man of many parts. In addition to his OpenAI role, he is also a Duke University professor of business and public policy. He earlier served as the Biden White House’s CHIPS coordinator, overseeing the execution of the $52 billion CHIPS and Science Act (in danger of being shelved by the current Trump administration); and also, was a senior economist on President Obama’s Council of Economic Advisers.

Will China give US-based tech companies a run for their money with low-cost, multimodal reasoning AI models, including Baidu’s new Ernie models, Chinese AI Labs’ DeepSeek, Monica’s Manus, and Alibaba’s Qwen? Chatterji believes the US and China follow different models in the global AI competition. The US relies on public-sector investment to catalyze private innovation. Ensuring a balance between technological advancements and national security remains a priority.

Ultimately, AI’s impact on economies will depend on strategic policy decisions and investments in human capital. Markets play a powerful role in shaping industries, but government intervention is crucial in setting the rules and establishing a strong foundation. This approach has proven effective across various sectors, particularly in the US, where it continues regardless of political shifts, according to Chatterji.

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When asked about AI’s impact on innovation and entrepreneurship, Chatterji pointed out that while enterprises grapple with adoption challenges, startups are leveraging AI to scale faster, reaching users and generating revenue at unprecedented rates. Different industries—such as healthcare, education, finance, and energy—will progress at varying speeds due to regulatory complexities and market dynamics, he said.

Entrepreneurship and innovation remain central drivers of economic growth, Chatterji said, elaborating that scientists and engineers working in labs can now accelerate research and commercialize breakthroughs more efficiently. Even a modest 10-15% increase in this process could significantly boost global economic expansion. The ability to take cutting-edge research and swiftly bring it to market is a game-changer, particularly in fields like medical technology, robotics, and AI-driven discoveries, he said, adding, “AI applications are really exciting. That’s really where the big ROI is going to come for these technologies.”

Meanwhile, OpenAI, which has raised $17.9 billion till date and was last valued at about $157 billion by its private investors, is reportedly set to raise $40 billion, which could propel its valuation to around $300 billion. The company’s key investors include Microsoft, Thrive Capital, and Khosla Ventures, with additional backing from major firms like Nvidia and SoftBank.

That said, fundraising is dependent on the outcome of the lawsuit filed by Elon Musk challenging the ChatGPT maker’s transition to a for-profit model. According to Reuters, both parties have jointly proposed a trial in December to expedite the case; the outcome is crucial to OpenAI raising more capital and competing in the global AI race.

Chatterji acknowledged that these are very “important” issues, but added that the answers were “beyond an economist’s pay grade”.

Incidentally, Chatterji’s visit coincided with Tuesday’s Delhi High Court’s second hearing of the copyright lawsuit filed by news agency Asian News International (ANI), alleging that OpenAI has illegally used its copyrighted news content to train its large language model (LLM) chatbot ChatGPT. It also followed the visit of Sam Altman, chief executive of OpenAI, to India early last month.

To a suggestion that Chatterji can be likened to an “Adam Smith of AI”, he said, “If you take the analogy further, and read Adam Smith’s original work (‘An Inquiry into the Nature and Causes of the Wealth of Nations’), he (Smith) was just trying to figure out the economics. I feel we’re at an inflection point where a lot of the things I learned in graduate school give me a good baseline to start to ask the right questions. But the world is coming at us fast — we recently discussed how geoeconomics, the rising tides of nationalism and populism, and technological changes are shifting how nations are thinking about these issues in a big way. I’m sort of figuring it out in the pin factory as we go along, and it’s a wild ride and a really exciting one. I wouldn’t trade it for anything.”

This is a key reason why Chatterji chose OpenAI. “The choice was about maximizing learning. After an academic and government career, the opportunity to contribute to a pioneering technology organization and engage with a rapidly evolving field was irresistible. The journey feels like reading a book that is being written in real-time—a privilege and an exciting challenge.”

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