More News from IWER

A guest on "Bloomberg Surveillance," professor of the practice Gary Gensler said AI leaders and hyperscalers need to generate meaningful revenue and productivity gains to meet current market conditions.

Technology with the potential to drive innovation and help create new activities is currently viewed by too many companies as a means to replace workers — and young people are most exposed. That is why professor Simon Johnson has embraced an invitation from the UK government to chair a new AI Economics Institute that aims to help policymakers shape the adoption of AI so that it boosts wages rather than worsens existing inequalities.

Professor Michael Cusumano and co-author wrote: "Large companies seeking access to new technologies have been establishing corporate venture capital (CVC) units for many years. But returns on those investments can be erratic, and new technologies can be difficult for the parent company to take advantage of. Why do many companies struggle to derive adequate benefits from their CVC efforts? We think that at the heart of the issue is a persistent confusion over objectives that ultimately makes CVCs difficult to sustain."

Lecturer Tim Valicenti and Stephanie Woerner, executive director of MIT CISR, joined a panel about "AI on Main Street" at the 617 Day small business summit. "We're missing a real opportunity if we don't think about how we can use AI to do things that we don't know how to do," said Woerner.

Institute Professor Daron Acemoglu has a number for everything. The MIT economist estimates that roughly 0.55% in total factor productivity gains is what AI will actually deliver over the next decade, a fraction of Wall Street's euphoric projections. He estimates only about 5% of tasks will be profitably automated in the near term, equivalent to a 1% or 1.5% increase in GDP.

Senior lecturer Robert Pozen wrote: "Investing in stocks is always a risk. But the historical data show the risk might not be exactly what advisors have ingrained in retail investors for decades. For those with a long-term investing mind-set and the stomach for riding out the market, 90-10 may be your best play."

Professor Eric So said: "For so much of human history, human-level intelligence was our most scarce resource, our most defensible advantage. Now, AI is increasingly commoditizing that. It's being mass-produced in a way that really causes us to question what's going to make us valuable in the future."

Research shows that consumers tend to spend more when using credit cards vs. cash. A 2021 study by professor Drazen Prelec and co-authors found that credit cards activate the brain's reward center and create an "anticipation of pleasure in the form of a purchase," comparing it to the smell of baked cookies triggering your appetite.

Senior lecturer Robert Pozen and co-author wrote: "What's new here is the deliberate stripping of powers that the SEC long held. Yes, Congress can and does occasionally do this, but not the agency's own leaders, especially without advance notice or an opportunity for comment. The current SEC commissioners are consciously weakening the agency's leverage in negotiations with large corporate defendants."

There are two reasons that gas prices could linger on the higher end, said Christopher Knittel, associate dean for climate and sustainability. One is the large amount of infrastructure in the Middle East that has been damaged or destroyed. The second is the uncertainty about whether sailing through the Strait of Hormuz is safe. "Basic economics tells us the riskier business is, the higher profits you have to earn to want to enter into that business," Knittel said. "Oil, gasoline, and natural gas have gotten more risky. That might actually keep us from ever getting back to prewar levels for gasoline," he added.