By Zoey
Artificial intelligence is rapidly reshaping the American economy, changing the way businesses are created, managed, and expanded while fueling an intense debate over whether the technology will ultimately generate more jobs than it replaces.
Although many companies driving this transformation are not themselves AI businesses, entrepreneurs across the United States are increasingly relying on artificial intelligence to perform tasks that once required expensive consultants, specialized expertise, or large teams of employees.
One such example is Here Now Health, a Virginia-based mental health company founded by Michelle Turner, whose journey illustrates how AI is becoming a powerful tool for first-time entrepreneurs seeking to build successful businesses.
Turner, who launched the company in January 2025, developed Here Now Health to address a critical gap in mental health services for children entering the foster care system. Her inspiration came directly from her own experience as a foster parent, where she witnessed firsthand the challenges many children face in accessing timely counseling and emotional support.
Working from her home in Virginia Beach, Turner used artificial intelligence extensively during the early stages of building the company.
Rather than hiring a large team of consultants, she turned to AI-powered tools to learn the fundamentals of launching a startup, develop a comprehensive business plan, prepare presentations for potential investors, and refine her fundraising strategy.
The approach proved highly successful.
Here Now Health has grown into a company employing 16 people and has received certification in three states to provide Medicaid-funded mental health counseling services for children entering the foster care system.
Turner credits artificial intelligence with helping overcome obstacles that might otherwise have prevented her from attracting investment.
As a first-time entrepreneur, sole female founder, and mother of six children without a traditional business education or MBA, she believed raising venture capital would have been far more difficult without AI assistance.
She described the experience as having access to an advanced business mentor every day, explaining that artificial intelligence guided her through many of the complex decisions involved in creating and presenting a compelling business case to investors.
Stories like Turner’s have become increasingly important as policymakers and economists attempt to understand how artificial intelligence will influence economic growth, employment, inflation, and productivity over the coming years.
The technology has become a central focus for officials at the Federal Reserve, who are studying its potential to fundamentally reshape the U.S. economy.
Federal Reserve Chairman Kevin Warsh has launched a broad review examining several major economic issues, with one panel dedicated entirely to artificial intelligence and its long-term effects on productivity.
Economists generally agree that higher productivity allows businesses to produce more goods and services with fewer resources, potentially supporting stronger economic growth while easing inflationary pressures.
However, the same productivity gains may also reduce demand for certain categories of workers if companies become able to accomplish more with smaller workforces.
Some Federal Reserve officials have already suggested that widespread AI adoption could eventually contribute to structurally higher unemployment if technological advances outpace the creation of new employment opportunities.
Other economists have pointed to the possibility that AI could increase returns for business owners and investors while reducing labor’s share of overall economic income, raising broader questions about wealth distribution and economic inequality.
The rapid expansion of artificial intelligence has been compared to the early growth of the internet during the 1990s, when companies such as Yahoo and America Online competed to connect millions of people online.
Today’s competition among AI developers is even broader, with companies racing to produce increasingly capable systems that can generate written content, analyze complex information, write computer code, automate routine office work, and assist with sophisticated decision-making.
Massive investment in data centers, computing infrastructure, and advanced semiconductor technology has become one of the strongest drivers of economic activity, creating demand for construction, engineering, energy production, and specialized labor.
At the same time, the enormous computing requirements needed to support artificial intelligence have contributed to rising electricity demand and increased competition for skilled workers in several industries.
Economists remain divided over the technology’s ultimate impact.
Some believe artificial intelligence could usher in an era of extraordinary productivity, stronger economic growth, medical breakthroughs, and increased prosperity.
Others warn that automation may eliminate millions of routine office jobs, forcing many workers into lengthy transitions before finding new careers.
Jean Boivin, head of the BlackRock Investment Institute, recently described financial markets as weighing two competing visions of the future.
One scenario centers on scarcity, where the AI investment boom increases demand for capital, labor, and infrastructure while pushing costs higher.
The other envisions abundance, in which artificial intelligence dramatically improves productivity, accelerates innovation, and enables the economy to grow faster than it has in decades.
Some experts believe the reality will likely fall somewhere between those two extremes.
John Bailey, a senior fellow at the American Enterprise Institute and an adviser to one of the investment firms backing Here Now Health, believes artificial intelligence is lowering barriers that once prevented many entrepreneurs from starting companies.
According to Bailey, tasks that previously required significant financial resources or months of work can now be completed much more quickly and at a fraction of the cost.
He argues that artificial intelligence is enabling traditional businesses—not just technology firms—to expand more rapidly, serve customers more efficiently, and hire employees sooner than would otherwise have been possible.
While public attention often focuses on AI replacing workers, Bailey believes the technology is more likely to transform jobs than eliminate them entirely.
He compares the current transition to previous technological revolutions, where new tools changed the nature of work while ultimately creating entirely new industries and occupations.
Torsten Slok, chief economist at Apollo Global Management, shares a similarly optimistic outlook.
He believes artificial intelligence has contributed to the recent increase in new business formation across the United States by dramatically reducing the complexity and expense involved in launching companies.
As those businesses expand, he expects many will create additional employment opportunities.
Despite those optimistic assessments, uncertainty remains about the long-term balance between job creation and job displacement.
Recent improvements in employment growth have eased fears that artificial intelligence was already triggering widespread labor market disruption.
Nevertheless, Federal Reserve officials continue monitoring developments closely.
Richmond Federal Reserve President Thomas Barkin has acknowledged the uncertainty surrounding AI’s effect on employment.
While he recognizes that automation could eventually replace certain categories of workers, he also notes that many employers continue struggling to fill skilled positions in industries such as manufacturing and automotive repair.
In those sectors, businesses are increasingly using artificial intelligence to improve the productivity of existing employees rather than replacing them outright.
Barkin believes some white-collar occupations face greater long-term risks, particularly jobs involving repetitive administrative or clerical tasks.
However, he emphasizes that labor shortages remain widespread across many industries, suggesting the overall economy continues to require additional workers even as technology advances.
Economists also caution that major technological transitions often involve significant disruption before long-term benefits become fully apparent.
The globalization of manufacturing during the 1990s led to the decline of many industrial communities across the United States, particularly in parts of the Midwest and South.
Efforts to retrain displaced workers frequently produced limited success, leaving lasting economic and social consequences that continue to shape many communities today.
Researchers warn that artificial intelligence could create similar challenges for office workers whose jobs involve clerical, administrative, or routine analytical responsibilities.
A recent study by the Brookings Institution and Opportunity@Work estimated that approximately 23 million American workers may face increased exposure to AI-driven disruption because the next logical step in their careers leads into occupations that are especially vulnerable to automation.
The researchers cautioned that interruptions in these career pathways could make it more difficult for many workers, particularly those without college degrees, to advance into higher-paying positions.
They also found that the greatest risks may be concentrated in states including Florida, Texas, California, and much of the Northeast, regions where many office-based occupations susceptible to automation are heavily concentrated.
For the Federal Reserve, understanding both the speed and the scale of AI adoption will remain essential as policymakers evaluate future economic conditions.
Officials are seeking to determine whether the short-term disruption caused by artificial intelligence will eventually give way to a sustained increase in productivity capable of supporting stronger long-term economic growth.
Chairman Kevin Warsh has described artificial intelligence as the most significant economic development of his adult lifetime, expressing confidence that the United States will ultimately benefit from the technology.
At the same time, he acknowledged that the transition is unlikely to be smooth, emphasizing that while AI promises enormous opportunities for innovation and growth, it will also bring significant disruption as businesses, workers, and the broader economy adapt to a rapidly changing technological landscape.
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