• San Francisco Fed President Mary Daly says AI-driven productivity is in early stages of potential exponential rise.
  • Micro-level experiments show 20-50% efficiency gains in knowledge tasks, with larger boosts for less experienced workers.
  • Broad adoption hinges on responsible-use protocols, retraining, and safety standards.

Federal Reserve Bank of San Francisco President Mary Daly said the U.S. is in the early stages of a potential exponential rise in productivity gains from artificial intelligence, as micro-level experiments show meaningful speed and quality improvements across knowledge-work sectors.

“We are at the beginning of what could be a very significant productivity boost,” Daly said at a conference on Tuesday, citing evidence from workplace experiments that AI-assisted professionals in writing, coding, customer service, and analytics are seeing efficiency uplifts of 20% to 50%. The gains are particularly pronounced for less experienced workers, who benefit from AI’s ability to augment training and guidance.

Daly’s comments add to a growing debate among economists and policymakers about whether generative AI can deliver a sustained productivity boom similar to earlier waves of digital technology. Early results, she noted, are promising but uneven: tasks combining routine elements with expert oversight yield the highest improvements, while concerns about overreliance and misinformation remain.

“What’s exciting is that these gains are real and measurable,” said Daly, who emphasized that achieving broad macro-level benefits will require responsible deployment, investment in retraining, and clear safety standards. “Without those, the potential could be squandered.”

The remarks come as major tech firms and AI platform providers ramp up integration of generative AI into enterprise tools, signaling faster adoption curves. Economists at the OECD and Brookings have highlighted similar patterns, noting that productivity gains could boost living standards but may also compress employment in routine roles while widening skill premia.

“We’re seeing a shift from experimentation to deployment,” said a person familiar with corporate AI strategies, speaking on condition of anonymity. “Firms are starting to see the bottom-line impact.”

Daly’s outlook aligns with parallel research from central bank and academic studies, which point to a cautious but optimistic trajectory for an AI-enabled productivity surge. However, she cautioned that the full effects may take years to materialize as policies and workplace practices evolve.

“This is not a straight line,” Daly said. “But the direction is clear.”