WARNOCK PUSHES FEDERAL RESERVE CHAIR KEVIN WARSH TO IMPLEMENT ARTIFICIAL INTELLIGENCE POLICY THAT PROTECTS ALL AMERICANS, NOT JUST TECH EXECUTIVES

The following information was released by Georgia Senator Reverend Raphael Warnock:

According to aBloomberganalysis,spendingon artificial intelligencehas risen to about 8 percent of U.S. gross domestic product

Americans'retirement accounts are increasingly tied totheartificial intelligenceindustry, driven by massive increases in the stock prices of chip and AI companies

Earlier this year, Senator Reverend Raphael Warnock introducedlegislation to supportAmerica's workforce amid the rise of artificial intelligence

Senator Warnock:"Buthere'smy problem: Americans are worried about what AIwill mean for the economy, andI'mworriedthatthis viewpointisn'trepresented at the Fed"

Washington, D.C. Senator Reverend Raphael Warnock(D-GA), Ranking Member of the Senate Banking Committee's Economic Policy Subcommittee,questionedFederal Reserve Chair Kevin Warshabouthowtoprotect Americansfrompotentialeconomic uncertainty tied tothe growth ofthe artificial intelligence(AI)industry.

"I'dbe worried about a massive economic slowdown.You know, theimpact of Wall Street onMain Street, andI'dbe worried about job losses,"said Senator Warnock."Stock prices tumbling would mean Americans could not retire as planned, andIdon'twant to see taxpayers holding the bag should this AI bubble pop... Buthere'smy problem: Americans are worried about what AI will mean for the economy, andI'mworried that this viewpointisn'trepresented at the Fed."

According to a recentBloomberg analysis,AI spending accounted for approximately 8% of U.S. gross domestic productand wasaleading driverofeconomic growth.Despitegrowing alignmentbetween the tech industry and topWall Streetinvestors,major AIfirmshaveyet to generatemeaningfulprofits.DuringWednesday'sBanking Committee hearing, Senator WarnockpushedChair Warsh to considerthisas he seeks input on AI.

Senator Warnock has championed protectionsfor American workersas automation and AIreshapethe workforce and economy.InFebruary,Senator WarnockintroducedtheInvesting in Tomorrow's Workforce Actto increase investments in worker training and prepare workers for jobs of the future.Healso successfully secured$65 millionin funding forthe Georgia Institute of Technologyto help theuniversityremain a national leaderin computer scienceresearchandinnovation.

See below a transcript ofWednesday'shearing exchange

Senator Reverend Warnock (SRW):"The American economy is heavily leveraged on the success of artificial intelligence, and this is an issue that I'm very interested inbeen engaging and talking to folks in the industry and folks outside of the industry, various stakeholders. According to a Bloomberg analysis, AI spending most recently climbed to about 8% of the U.S. gross domestic product, driving the country's economic growth. Chair Warsh, you have long been bullish on AI. However, up to now, despite investors betting big on them, none of the major AI models have been meaningfully profitable. What are the consequences to our economy if none of these companies ever become profitable?

Federal Reserve Chair Kevin Warsh (KW):"So, if they were to disappoint investors, I think the capital markets would dry up for them, and some of that capital investment would be curtailed."

SRW:"I guessthat'sone way of putting it. I guessI'mgetting at where ordinary folks arein the midst ofthat. The markets behind the markets are real people who have retirement savings and who are trying to make their present as well as their future work. American retirement accounts are increasingly tied to AI, and sothere'sthe human issue driven by massive increases in the stock prices of chip and AI companies. You might talk about the current markets in a way. Itsortofitistall and narrow.Let'simagine if we are in an AI bubble. What would happen to our economy, and more specifically, Americans' retirementsavings, ifthat bubble popped?"

KW:"So, I thinkit'sa fair question, Senator. I take it seriously.I'mnot in the business of providing a Wall Street newsletter, butI'llsay broadly to your question about the effects on the economy: booms and busts do not help the real economy, and theydon'tmake the central bank's job easier. What the central bank is trying to achieve is price stabilityfull employmentall in the context of financial stability.

"On the question of these AI companies, certainly the surge in their investment and the surge in their valuations is notable. ButI'llalso note oneotherthing, Senator. Over the course of the last couple of months,we'veseen the market capboth of the publiccompanies and of private companiesunder some pressure at the overallindexes. We do seem to see a broadening out now. Why is that? Because earnings now for the last several quarters more broadly are moving up. Idon'twant to suggest that should give us any complacency, but what the Fed's looking for is economic strength to broaden and the inflation that we talked about earlier to becomemore narrow."

SRW:"So,I'dbe worried about a massive economic slowdown. You know, the impact of Wall Street on Main Street, andI'dbe worried about job losses. Stock prices tumbling would mean Americans could not retire as planned, and Idon'twant to see taxpayers holding the bag should this AI bubble pop.I'mnot against AI. AI is not going anywhere. It has both promise and peril. I just want us to be thinking critically about this from all angles.

"Earlier this month, you announced a new task force to assess the effect of AI on productivity and jobs. The three individuals you chose for the task force are tech executives who have directly worked for or with AI labs. All three of them. Yes or no,willthe Fed include anyone on this task force with an alternative viewpoint on AI? For example, anyone whorepresentsthe workers whose lives may beup endedby increased adoption of AI tools and technology?"

KW:"So, Senator,it'sa fair question. As I mentioned to your colleague a few moments ago, whatI'dsay is one of the people on thosetask forcesisan academic.NowIdon'twantto suggestthatthe academic is representingsome..."

SRW: "You don't want to suggest that the academic is being academic"

KW: "Idon'twant to suggest that, but thisisn'ta faculty lounge discussion.What I do want to suggest is thatacademic'swork has spent a lot of time talking about prior technology shocks and the displacement that it has on labor. The assurance I can give you is that these three people on that task force, like the other task forces,they'renot the deciders.You'retalking to one of the deciders.The 19 of us around theFOMCwitha breadth ofbackgroundsand interest,we'regoing todecidewhatwe think of theirconclusions."

SRW:"As a decisionmaker, I alwayswantvarious viewpoints.I certainlyhavenothing againstanacademicexpertise.I think youknowthatthat'simportant, andit'stoo often ignoredin some of the appointments that we've seen around here lately. Buthere'smy problem:Americans are worried about whatAIwill mean for the economy, andI'mworriedthatthis viewpointisn'trepresented at the Fed."