Good news! The massive investment into AI has made American households on average significantly wealthier, and will continue to do so for years (if not the next decade). Bad news? The gains will only reinforce the K-shaped economy in the medium term; any improvement in the fortunes of medium to low earners is some way off.
AI has delivered more than a 7% uplift in household wealth for U.S. consumers, Oxford Economics CEO Innes McFee told the company’s Global Economic Outlook conference in London this week. However, this “powerful boost” has mostly landed in the pockets of high-income Americans.
The “wealth effect” created by the blockbuster spending in AI (households feeling wealthier because the value of their assets is increasing, and thus increasing their spending) will reinforce the K-shaped economy, likely until 2035, McFee later told Fortune in an exclusive interview. The K-shaped economy is a phenomenon in which the fortunes of the wealthy track steadily higher, while those on the lower end of the income spectrum gradually sink.
In 2025 the idea of this diverging economy was supported by research from the likes of Moody’s chief economist Mark Zandi, who observed that the economy is being almost exclusively driven by the sentiments of the “well-to-do.”
