Research Highlights
How New York City Can Come Out a Winner in the AI Age.
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By Arpit Gupta
As seen in: Vital City
In May, New York City’s comptroller, Mark Levine, put hard numbers to a worry that has been hanging over the city’s economic landscape. His report modeled five ways, ranging from optimistic to dire, that artificial intelligence could reshape the local economy. In the worst case, the private sector could lose over 100,000 jobs by 2027, which would cost the City billions in foregone revenue.
Levine is right to focus on New York City’s unique exposure to AI. The city is focused on knowledge-intensive white-collar work, and many workers do the exact same routine knowledge tasks AI is learning to master. But the report also points out something more hopeful: Levine notes the city is already home to hundreds of firms competing to make New York “the capital of applied AI.” This is the real opportunity. New York City will not win the battle for AI by simply bracing for impact or racing to the bottom to attract firms through tax breaks for data centers. The city is unlikely to overtake San Francisco in the race to develop frontier models or Northern Virginia in being home to GPU clusters.
New York City can capture the highest-value AI jobs by becoming the key hub for what the industry calls the “application layer” for AI. This is where AI’s capabilities meet the demands of real-world industries, most of all in regulated sectors. Think using AI to reshape law, finance, medicine, real estate, media, insurance and other sectors. These are all sectors where New York City already has an unmatched level of density and agglomeration of talent, where the economic value of AI will ultimately be realized. The opportunity for New York lies in becoming the primary destination for firms seeking to build the plumbing and deployment for AI across these different domains. This is where the high-paying jobs of the future are likely to be located, and hence New York City’s future tax base.
Read the full Vital City article.
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Arpit Gupta is Associate Professor of Finance at New York University Stern School of Business.