AI’s productivity boom will likely create a ‘winner-takes-all’ economy, top EY economist warns

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Despite promises that AI could prove to be society’s great equalizer, Gregory Daco, the EY-Parthenon chief economist, argues that “productivity growth protects margins, not income.” 

“You tend to have greater concentration and more of a winner-takes-all type of environment when you have these technological advances,” Daco said in an interview with Fortune’s Eva Roytburg. In almost every technological revolution—the railroad boom of the late 19th century, or the 90s dot-com revolution—large, vertically-integrated firms initially capture the gains, while smaller ones face “persistent cost pressures, persistent policy uncertainty, higher interest rates,” Daco noted. 

In 2026, economic output grew 1.7% in the second quarter, just based on 0.3% more hours. Compensation rose 2.6%, which, set against a spring and summer of oil-driven inflation, comes out to “flat to slight contraction” in real terms, added Daco. 

Meanwhile, margins hit a record 14.9% of GDP, while the labor share fell to 52.8%, the lowest since the government started counting in 1947. Daco said that 50% isn’t a floor and that labor’s share could fall even further.

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