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What must happen for AI's trillion-dollar gamble to pay off
A handful of so-called hyperscalers are investing huge amounts of money to build AI data centers. While the hyperscalers plan to spend trillions, total AI revenues will be around $150 billion to $200 billion this year, says professor of the practice Gary Gensler. "The challenge is that the spending does not have commensurate revenues yet. That's a fact," he said. "And then the question is, is that an investment that will be paid off in the future?"
Federal Reserve is expected to raise its benchmark rate, defying Trump's demands
A rate increase would throw another sharp shift into a volatile period for the economy and financial markets. With the Iran war flaring up again and causing sharp increases in oil and gas prices, inflation is likely to remain higher than the Fed's 2% target for even longer. "I don't see any end to the war in Iran right now," said professor Kristin Forbes. "Given what everyone has been through in the last few years of high inflation, consumers are more sensitive, companies are more sensitive, and they raise prices faster. The risks are much more on more persistent inflation than on it falling quickly."
AI needs regulation now
Professor John Sterman has called AI both "promising and problematic." He's skeptical that the industry can adequately regulate itself and sees dangers with AI. Sterman does see outcomes where AI can be harnessed to solve societal problems such as climate change, but, he said, that will take smarter government policies and incentives. A simulator he helped develop, En-ROADS, allows users to explore AI's potential impacts on climate change.
Fewer employees, more resilience: how AI could redistribute economic risk
The closure of an industrial site, the bankruptcy of a large group, or a massive restructuring plan can simultaneously affect several thousand households, suppliers, subcontractors, and sometimes an entire region. It is precisely this risk that senior lecturer Paul Cheek puts back at the center of the debate. According to him, large, innovative companies are generally perceived as beneficial to the economy because they concentrate a high volume of jobs. However, this concentration can also produce a systemic risk when the economic health of a region depends on a limited number of actors.
AI doesn't care if you're embarrassed (and that can be a good thing)
People consistently rated human advisers as more competent than AI advisers when evaluating who could best solve their problem across domains that included financial, technological, medical, and career advice, according to a study by professor Eric So and co-authors. But that situation changed once shame entered the picture. That preference reversed when a client's problem would require them to reveal embarrassing information.