AI spend is staggering and will persist, says Wells Fargo's Tom Porcelli

Summary

Wells Fargo chief economist Tom Porcelli discusses AI's impact on the economy, stating that AI spending is staggering and will persist, adding meaningfully to GDP. He notes no measurable job displacement from AI yet, and highlights that tradespeople are benefiting from the capital spending cycle. The conversation also touches on political narratives around AI and its inflationary effects.

• Tom Porcelli argues AI capital spending is large and will persist, contributing close to a percentage point to GDP.
• No significant AI-driven job losses are visible in the aggregate labor data at this point.
• Tradespeople are seeing high wages due to the ongoing capex cycle in AI infrastructure.
• The spread between college graduates and non-graduates in the labor market is widening, suggesting some disruption may be starting.
• AI spending is currently more inflationary than disinflationary, contrary to some expectations.
• The host and Porcelli discuss the potential political implications of AI, including Bernie Sanders' proposal for direct payments.