AI fundamentally changes the world, massive changes are coming including massive economic benefits, proper US stewardship key

The emergence of generative AI marks a transformational moment that will influence the course of markets and alter the balance of power among nations. Increasingly capable machine intelligence will profoundly impact matters of growth, productivity, competition, national defense and human culture. In this swiftly evolving arena, corporate and political leaders alike are seeking to decipher the implications of this abrupt and powerful wave of innovation, exploring new opportunities and navigating new risks. The world is facing a narrow window of opportunity – what we call the inter-AI years – to shape the AI-enabled future. This window will be brief – a few years at most – then views and strategies will harden; norms, values, standards will be embedded within the technology; and the costs of changing course will rise. While AI-enabled technology will continue to progress, decisions made today will determine what is possible in the future. A generative world order will emerge. The US and China are the world’s top AI competitors, but they are also the top AI collaborators. However, in generative AI, most of the cutting-edge innovations today are coming from the US, and China faces an uphill in training LLMs, for now. This technology competition will see geopolitical priorities drive economic decision-making, including through export controls, sanctions, tariffs, industrial policy, investment screening, and other measures deployed to increase absolute and relative advantages. Geopolitical swing states will have a meaningful role in shaping the AI-enabled future. In particular, UK, the UAE, Israel, Japan, the Netherlands, South Korea, Taiwan, and India are the key players in the category. Moreover, these players may form innovation blocs, creating alliances and partnerships with more dominant states or cooperating with each other to pursue common goals. The technology’s development will shape its geopolitical effects. New capabilities will lead to novel use cases and broader impact. We expect generative AI models to become increasingly multimodal, seamlessly reckoning with text, images, audio and video. Focus will also shift toward performance and value engineering, making this technology less costly and more sustainable. The incorporation of persistent memory will enable better long-range planning and true agentic scenarios. Perhaps the timeliest question is whether generative AI will follow a scale up trajectory, with models increasing in size and likely dominated by large commercial enterprises, or whether they will scale down, favoring a broader set of providers and open source approaches. The most profound impact of generative AI may be on economic growth. Goldman Sachs Research estimates a baseline case in which the widespread adoption of AI could contribute 1.5% to annual productivity growth over a ten-year period, lifting global GDP by nearly $7 trillion. The upside case carries a remarkable 2.9% total uplift. But these outcomes are not guaranteed and will be determined by four key components: energy, compute, data, and models. Next year will witness several key milestones for the future of generative AI. The world’s three largest democracies, and approximately 41% of the global population, will participate in national elections. AI will continue to accelerate and be adopted by state and commercial actors for everything from defense, to health care, to education, and more. At the end of 2024, we will have a better idea how AI will transform scientific discovery, labor, and the balance of power.