AI Hype and Skepticism: Economist Paul Romer

**Sam Ransbotham** (0:02)
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**Shervin Khodabandeh** (0:57)
What does a Nobel Prize-winning economist think the future of AI holds? Find out on today's episode.

**Paul Romer** (1:04)
I'm economist Paul Romer, and you're listening to Me, Myself, and AI.

**Sam Ransbotham** (1:10)
Welcome to Me, Myself, and AI, a podcast on artificial intelligence and business. Each episode, we introduce you to someone innovating with AI.
I'm Sam Ransbotham, professor of analytics at Boston College. I'm also the AI and Business Strategy guest editor at MIT Sloan Management Review.

**Shervin Khodabandeh** (1:29)
And I'm Shervin Khodabandeh, senior partner with BCG and one of the leaders of our AI business. Together, MIT SMR and BCG have been researching and publishing on AI since 2017, interviewing hundreds of practitioners and surveying thousands of companies on what it takes to build and to deploy and scale AI capabilities and really transform the way organizations operate.

**Sam Ransbotham** (1:56)
Hi, everyone. Today, Shervin and I have a fun treat for you. We're joined by Paul Romer, winner of the 2018 Nobel Prize in Economics. He's a professor at Boston College and directs its new Center for the Economics of Ideas.
Paul's got a fascinating background, including time as the chief economist at the World Bank, founder of multiple companies and avid contributor to public policy discussion everywhere. He's really at the forefront of thinking about how the economics of ideas differs from the traditional economics of scarce physical objects.
And beyond that, he's just kind of interesting and a nice person. So we're thrilled to have you with us today. Thanks for taking the time to talk with us.

**Paul Romer** (2:36)
Well, I'm glad to be here. It's always fun to talk.

**Sam Ransbotham** (2:38)
All right, let's go ahead and start off with the elephant in the room. There's a whole lot of talk about artificial intelligence right now. If we think about the spectrum of technologies and how they will affect society, you know, we might have like wheel and fire and electricity and steam engine on one side and maybe transistors over there.
And the other hand, we have something like segues and clippies. Where are we in this spectrum with artificial intelligence, do you think?

**Paul Romer** (3:06)
Let me start by just repeating something I said in class yesterday, because my students are very excited about AI.
I'm a little more skeptical. I think there's a lot that will be possible because of AI. But I think people are buying a little bit too much of the hype and they're losing perspective. I told them that I don't think AI is actually the big revolution that we're living through right now.
The real revolution, I think, is stuff we're seeing coming out of the war in Ukraine.
And the nature of that revolution is that sensors and devices are giving people the ability to do things that they could never do before. So the problem with the way most people are framing AI is they're thinking about autonomous vehicles where you're taking the human out of the loop. The technology is the replacement for the human. That is not working that well. The autonomous vehicles were supposed to be the killer application of AI, and it's turning out to be a bust. There's a reason Apple just canceled its car project. But if you go back to using technology to enhance what people can do, you have an interface that lets a human interact with data from a lot of sensors and software that then translates what the human does in the interface into things that are happening out in the world. Incredible things are going to come out of that. But this kind of just turn it over to the machine and let go, I think that's going to turn out to be very disappointing. Part of the way I tried to explain to the students how big this revolution is, if you look at an organization like the Marines, the Marines recognized a while ago, the tank is just history. Weapons like the tank are not going to be important going forward. And they're thinking about things like electric motorcycles and portable missiles.