In its latest issue, The Economist posed a provocative question: What if artificial intelligence doesn’t just disrupt the global economy but detonates it?
On Episode 159 of The Artificial Intelligence Show, me and Marketing AI Institute founder and CEO Paul Roetzer dug deeper into this scenario.
Our conclusion: As wild as it sounds, we may be vastly underestimating the economic blast radius of AGI.
The underlying theory is deceptively simple. Unlike past technologies that boosted productivity incrementally, artificial general intelligence (AGI) could automate not just labor, but innovation itself. That means AI systems wouldn't just complete tasks more efficiently—they could discover new ideas, design better technologies, and improve their own architectures.
In other words, AI could trigger an "intelligence explosion," driving GDP growth into uncharted territory. Some models, like those from Epoch AI, suggest annual growth rates could exceed 20-30%. Compared to today’s relatively sluggish rates, that’s an economic big bang.
Roetzer points out that even seemingly "modest" AGI-driven growth of 5-7% annually would still be transformative.
"There's literally trillions of dollars to be unlocked here," he says.
If growth is about to go supernova, why aren’t markets acting like it?
As Roetzer notes, current US GDP shrank by 0.5% in Q1 2025. Against that backdrop, projections of 30% annual growth sound absurd.
Economists, too, remain skeptical. Many still rely on outdated models that assume only a small fraction of work can be automated. But as AI becomes more capable, those assumptions begin to crack.
Even if explosive growth does materialize, prosperity won’t be equally distributed. One emerging consensus: capital will win, and labor may lose.
As AI gets cheaper and more capable, wages could shrink, says The Economist. Eventually, workers might be priced out of the labor market entirely. The returns will accrue to those who own the AI and the infrastructure that powers it.
In this future, owners of capital—not workers—capture most of the wealth. And that’s a key reason behind the current investment frenzy. Tech firms are racing to build AI infrastructure now so they can dominate the value chain later.
It also explains the trillions of dollars being funneled into projects like OpenAI’s Stargate and the US government's aggressive AI acceleration agenda. Even if only a fraction of the most bullish forecasts come true, the returns could be staggering.
"The companies that can be at the center of it, which largely are the AI model companies and the companies that produce the energy and the infrastructure to enable those things," says Roetzer. "And so companies spending tens of billions or hundreds of billions is nothing for the opportunity."
The alternative is sitting on the sidelines and risking irrelevance, which none of the major players are willing to do.
According to The Economist, even today’s jaw-dropping investments of tens or hundreds of billions pale in comparison to what might be needed: an estimated $25 trillion this year alone to optimally build AI capabilities.
Meanwhile, traditional economic guardrails—like central bank rates and stock valuations—are not yet reflecting this future. But if AGI-induced growth kicks in, financial fundamentals could shift overnight.