New OpenAI Director: Soft Landing Still Unknown, AI's Impact on Future Development Profound

Lawrence Summers, also known as Larry Summers, former president of Harvard University, Treasury Secretary, newly appointed board member of OpenAI, and one of the most influential economists. Summers recently discussed the chances of a soft landing for the U.S. economy and the future prospects of AI in an interview with Financial Times.

Have We Soft-Landed Yet?

Summers believes it is too early to determine whether we have soft-landed, as some potential inflation rates currently observed are well above 2%, and it is uncertain whether they will rise again.

Summers offered several indicators to watch for, such as declining credit flows, an inverted yield curve, signs of consumer behavior and credit tightening, all of which could increase the likelihood of a soft landing.

If a soft landing refers to a period where inflation is above 4%, unemployment is below 4%, and this situation is overcome without an economic recession, then such a scenario has never occurred in the United States. However, Summers believes it is indeed a possibility, although there is still a long way to go.

Forward Guidance May Cause Trouble for the Fed

Summers believes that the Federal Reserve's emphasis on forward guidance and transparency has already caused significant damage to itself.

Summers emphasized that he would look for very clear evidence that inflation has been durably suppressed, as he is very concerned that people may confuse whether the 2% inflation target has been met.

Views like the recent market belief that "a soft landing will be achieved, and the Fed will be able to cut rates by 100 basis points next year" have shocked Summers, but that is not his central expectation.

Many in the market also interpret that the Fed's rate-cut expectations provided last week could make asset markets too hot, deepening concerns about a resurgence of inflation.

Summers Talks AI as He Joins OpenAI Board

OpenAI underwent significant leadership changes in November, with Sam Altman returning as CEO and new board member Larry Summers. When asked about AI-related issues, Summers stated:

The development of basic technologies often takes longer than you imagine, then happens faster than you can imagine.

Summers mentioned that most discussions he encounters about artificial intelligence revolve around how to optimize tasks better. But he predicts that decades from now, when history is written, a significant portion will involve tasks that we currently cannot imagine. The extent to which artificial intelligence will bring about macroeconomic changes in the coming years remains to be seen, but it will indeed have long-lasting impacts, whether it be in a decade, a generation, a century, or a millennium, it will be very profound.