AI Revolution's Rapid Global Impact: A New Economic Divergence Unfolds

As history has shown, significant economic transformations often unfold quietly until their impact becomes undeniable. The Industrial Revolution, for instance, gradually reshaped the world across generations. However, a recent report from the White House Council of Economic Advisers suggests that we are currently witnessing a similar divide in the global economy, but with a more rapid pace. This analysis, released in January 2026, highlights a shift that is occurring over months rather than decades.

Entitled “Artificial Intelligence and the Great Divergence,” the 26-page report makes the case for American leadership in artificial intelligence through strategies like deregulation, infrastructure enhancement, and tech exports. This document is intentionally focused on promoting the administration’s policies, emphasizing “the actions President Trump is taking to ensure that America continues to lead on AI.” Yet, the data within the report paints an intriguing picture worthy of independent consideration.

The United States has achieved a remarkable concentration of AI capabilities. It holds approximately three-quarters of the world’s GPU cluster performance used for AI training. From 2013 to 2024, the U.S. saw private AI investment soaring past $470 billion, dwarfing Europe’s $50 billion in the same timeframe. China follows with a significant $9 billion investment in 2024 alone. Astonishingly, AI-related investment contributed 1.3 percentage points to U.S. GDP growth in the first half of 2025, likened to the impact of railroad investment during the Industrial Revolution. Investment in technology equipment and software rose at an annual rate of 28 percent in the first half of 2025, a significant leap from 5.5 percent the previous year.

The rapid evolution of technology further amplifies these advantages. Since 2010, computing power for AI training has increased about four times each year, amounting to a billionfold expansion since 2012. AI’s performance on coding benchmarks dramatically improved from 4 percent to 72 percent within a year. Moreover, the cost of running AI models has plummeted by anywhere from 9x to 900x, depending on the application. These advancements are substantial rather than incremental.

The adoption of AI reflects these trends. The report reveals that 78 percent of organizations incorporate AI in some form, up from 55 percent in 2023. Furthermore, 40 percent of U.S. workers now utilize generative AI at work. However, a significant gap remains between experimentation and actual production, with only approximately 10 percent of firms integrating AI into tangible products and services. For professionals in legal technology and information governance, this distinction is critical—it's not just about using AI, but about embedding it into core business processes.

The report takes a cautious stance on the impact of AI on employment. The data shows mixed results: some early-career roles in coding and customer service face disruption, while other industries report increased employment where AI enhances capabilities. The Council references Jevons’ Paradox, which suggests efficiency improvements can lead to greater overall resource use. Yet, for this to hold true, productivity gains must result in lower prices, and these must, in turn, generate sufficient demand to compensate for labor reductions. The future of legal services, whether mirroring the growth seen in radiology or the decline of telephone operators, remains uncertain.

Highlighting current AI system limitations, the report admits that today’s technology often struggles with complex sequences and cannot independently manage substantive projects. For tasks like eDiscovery and legal research, which require prolonged reasoning across extensive documents, these limitations are pertinent. While AI can expedite components of such processes, full automation of intricate legal tasks is currently beyond reach.

The proposed policies—deregulation, faster permitting, and energy infrastructure development—align with the administration’s goals, shaping the landscape for legal technology in the foreseeable future. The report estimates that deregulation alone might contribute an additional 0.3 to 0.8 percentage points to the annual GDP growth over two decades. The actual benefits will depend on implementation specifics not covered in the report and may vary across industries and workforce segments. Notably, differing international regulatory approaches add a layer of compliance complexity for organizations operating globally.

The Industrial Revolution’s economic shifts became apparent over a century, but the AI revolution, as argued by the Council, is accelerating this timeline. The divide is already quantifiable through investment trends, technological benchmarks, and adoption rates. For those in legal technology, the pressing question is not the absolute correctness of this analysis but whether their organization’s current strategies place them to harness AI’s potential or risk being outpaced by more agile competitors.

Guiding metrics from the report prompt crucial evaluations: Does your AI utilization fall within the 78 percent experimenting or the 10 percent actively producing? Is your investment in technology approaching a 28 percent annual growth rate? Are you prepared with governance frameworks for increasingly diverse regulatory landscapes? While these questions may not predict the coming of a second Great Divergence, they might determine your position within it.

Assisted by GAI and LLM Technologies

Source: HaystackID shared with permission from ComplexDiscovery OÜ