Artificial Intelligence relates to the modelling of human intelligence in machines that are created and programmed to think and learn like humans. This includes performing tasks such as solving problem, recognizing speech, and making decision. AI is changing the way we live and work, opening up new possibilities for socio-economic development. While it provides the opportunity for greater efficiency and convenience, AI is also making people rich. Forbes (2024) reports that Jensen Huang, the co-founder and CEO of chip company Nvidia, which controls 80 percent of the data-center AI chip market, has seen his net worth climb rapidly from a mere $4 billion five years ago to a staggering $119 billion due to bottomless demand for his company’s product. ChatGPT maker OpenAI is reportedly valued at $86 billion, and the rivals, Anthropic and Inflection have net worth of $15 billion and $4 billion, respectively, as of their most recent funding rounds.

By 2030, AI is projected to contribute enormously, about $15.7 trillion to global GDP, with $6.6 trillion coming from increased productivity and $9.1 trillion from consumption effects. Makridis and Mishra (2022) conducted a study in a few cities in the US and they find that cities with higher growth in AI job postings witnessed higher economic growth. The relationship between AI job growth and economic growth is driven by cities that had a higher concentration of modern (or professional) services. AI job growth also leads to an increase in the state of well-being. 

AI has the potential to profoundly change the way businesses operate, drive innovation, and improve the lives of millions of people. Some of the key sectors that could benefit from AI include healthcare, agriculture, education, and finance. In terms of resource optimization, AI-driven technologies enable more efficient utilization of resources across various sectors, minimizing waste and maximizing output. Examples include smart energy grids that optimize electricity distribution, reducing energy losses and promoting renewable energy integration.

One fascinating example of AI's potential comes from India, where AI has been used to help farmers interact with government bodies more easily. With the help of AI-powered language models, farmers can ask questions about grants and subsidies in their local dialects. The system then responds with the necessary information, and in some cases even helps them fill out the forms needed to apply. This has opened up access to crucial resources for a large portion of the population, streamlining the application process and eliminating the need for farmers to interact with government workers directly (Damaraj, 2023). 

Despite the wonderful changes brought by AI, it also has negative effect. Aghoin, et. al. (2020)  argue that the effects of AI and automation on growth and employment depend to a large extent on institutions and policies. AI can spur growth by replacing labor by capital, both in the production of goods and services and in the production of ideas. However, AI may inhibit growth if combined with inappropriate competition policy. 

Aghoin, et. al. (2020) examined the effect of robotization on employment in France over the 1994–2014 period. In  the study, Aghoin, et. al. (2020) conclude that robotization reduces aggregate employment at the employment zone level, and second that noneducated workers are more negatively affected by robotization than educated workers. This finding suggests that inappropriate labor market and education policies reduce the positive impact that AI and automation could have on employment. Aghoin, et. al. (2020) also report that, overall, France loss of 214,000 jobs during this period due to robots.

In summary, AI has transformed economies by driving innovation, boosting efficiency, and promoting sustainability. It also creates new opportunities, improves productivity, and helps companies to operate more sustainably. Looking forward, responsible AI adoption is crucial for maximizing its benefits. Continued research and collaboration will be key to ensuring that AI contributes to sustainable and inclusive economic growth in the future.

Finally, the adoption of AI in Malaysia needs to be monitored to ensure that it brings benefit to all and the side effect is minimized. Datuk Seri Anwar Ibrahim, the Prime Minister of Malaysia has expressed his aspiration on the direction of AI technology adoption and economic growth in Malaysia in his speech at The Global Forum on Islamic Economics and Finance, held in Kuala Lumpur on 28-29 May, 2024. He conveyed his desires to develop the Malaysian economy based on Islamic Economics by integrating AI to spearhead the economic development. Malaysia must lead the way to develop a Humane economy, an economy that ensures an inclusive growth and shared prosperity among the society, and ensure that AI is used to bring goodness to humanity.