Fed Chair Kevin Warsh Calls AI a Paradigm Shift

Federal Reserve Chair Kevin Warsh characterized artificial intelligence as a revolution and a paradigm shift during a European Central Bank conference in Sintra, Portugal, on July 2, 2026. Warsh asserted that the United States is positioned to be a big winner in the medium-term, arguing that the technology will boost productivity, create jobs, and strengthen global economies.

Warsh noted that AI investment in chips and data centers has already fueled economic expansion. Data from JPMorgan Asset Management (Japan) Limited indicates that AI spending drove approximately two-thirds of U.S. gross domestic product growth during the first half of 2025. While some analysts claim AI has not yet generated revenue commensurate with its costs, Warsh predicted business sentiment would shift toward a more positive view within six months.

In a related development, OpenAI proposed granting the U.S. government a 5% ownership stake in the company. Valued at approximately $42.6 billion, the proposal by OpenAI and Chief Executive Sam Altman aims to allow the public to share in the economic gains generated by the technology.