Why Big Tech wants more economists

Soumaya Keynes (0:01)

First, AI companies came for the engineers. Now, they're coming for the economists. Beyond hiring teams of economists, the big AI labs are increasingly trying to fund and collaborate with researchers. OpenAI has an economic research team, and has launched an economic research exchange to collaborate with outside academics. Anthropic is doing something similar.

All great news for economists is that they are keen to dig into the exclusive data that AI labs hold. But it does raise a question. Should we worry that to find out what AI is actually doing to our economy and society, we have to ask an AI company?

This is The Economics Show with Soumaya Keynes. And this week, I want to explore the trend of economists working with or for AI companies, including the potential for conflicts of interest. AI could dramatically reshape our economies and societies. It is incredibly important to ask and answer the right questions about this transition. First, let's hear from Ara Kharazian. He is the lead economist at Ramp, a New York-based financial software company that tracks corporate spending. He's got the sub-stack where he shares insights based on the data that his company collects. For example, the Ramp AI index shows which AI models US businesses are buying. In August, Anthropic's lead over OpenAI increased.

Because we always kick off the show by asking a question for which the answer is on a scale of 1 to 10, I asked Ara where he sees demand for economists among AI companies right now.

Ara Kharazian (1:49)

I'm going to answer in a very economics way where there was really very little demand from AI companies, it's at a 10

It is the highest it's been. I myself have never noticed higher demand for this public facing role side at least of it for economists at AI startups and companies. We're definitely in a hot moment right now for the job market.

Soumaya Keynes (2:07)

Okay. Well, why is demand for economists so hot right now?

Ara Kharazian (2:11)

I mean, you can imagine that AI is a very new and nation technology. Everyone wants to know how it's going to affect the economy. It's not showing up in productivity statistics. So you want to get as close to the data and the users as possible to understand first who's using it at all, and then how are those firms using it? So you can imagine there's demand for that kind of data both from governments and from investors and the financial markets, but also from the general public too. But there is also a history here.

AI companies are not the first to start their own economics research function. I think it started with the big banks around the time of the financial crisis. You didn't see tech start to do it until a similar rupture in public trust. Cambridge Analytica, when tech companies then became the sort of irer of the general public.

And then now you have this sort of new era, where AI companies similarly have this sort of public trust issue, trying to argue both in favor of their technology in front of the government and also in front of consumers. Where there is very little data otherwise available to understand how this technology is affecting our day to day.

Soumaya Keynes (3:16)

I mean, what you're describing sounds like economists are kind of involved in an elaborate PR exercise, right? Partly it's kind of shaping the narrative. They're the ones that have access to the data. The companies have an interest in rebuilding that trust with whoever. And so, yeah, economists are just part of that.

Can we talk about Ramp specifically, which is where you are the chief economist? Why does Ramp have a chief economist?

Ara Kharazian (3:42)

Well, you can think about the questions that we got asked by our own customers.

So, Ramp is an AI finance platform. So, you can think about the data set that I work with by thinking about our core products. So, let's just say corporate cards and bill pay and invoicing. So, essentially, the whole universe of business spend, everything except for payroll, is what I get to see. And as a researcher, that's such a privilege because it's both a very broad set of businesses. It's a very broad set of the investments that businesses are making. It's also highly granular because you can see the line items on bills and receipts. And so we have found that we can start publishing aggregate and anonymized statistics from our data set about how businesses are investing in a new in-nation technology, something like AI or something else, and share that data ideally with the purpose of helping other businesses, whether they use RAMP or they don't use RAMP, also make better decisions and become more productive.