U.S. technology firms have spent an estimated $400 billion this year on AI infrastructure. That spending is estimated to increase to $3 trillion worldwide by 2028—raising questions about whether such investments can possibly pay off and about the nature of the technology itself.

Will the technology shift the balance between capital and labor? Could it lead to runaway growth of the economy? And is AI a fundamentally extractive technology?

Those are just a few of the questions that came up in my recent conversation with FP economics columnist Adam Tooze on the podcast we co-host, Ones and Tooze. What follows is an excerpt, edited for length and clarity. For the full conversation, look for Ones and Tooze wherever you get your podcasts. And check out Adam’s Substack newsletter.

Cameron Abadi: AI is often described by economists as a “general-purpose technology.” What are the economic implications of that designation?

Adam Tooze: This is a great place to start, I think, because it takes us to the heart of how economists are trying to figure out how AI relates to the economy and to the familiar history of economic development and technological change. So “general-purpose technology” is a phrase that economists came up with to describe, in some ways, a puzzle. So technologies that in their immediate impact on the economy were sometimes subtle and hard to detect, and yet over time, they become indispensable and almost impossible to imagine the world without. The sort of thing we’re talking about is steam power or electrification or the internal combustion engine or semiconductors. And the idea is that AI might be that kind of technology.

So the list is short. The question with AI is not so much is it a general-purpose technology, but is it something more than just a normal general purpose of technology? Is it something hyper? Is it, in some senses, the end point of all technological development because it’s a technology about technology? Because what we’re doing here is applying technology to thinking, which is the source of technology. And so that then raises a bunch of other questions. I think most economists are agreed that this is a normal general-purpose technology. The question is, could it be some sort of unprecedented general-purpose technology?