AI and task efficiency

We model several ways in which AI may improve decisions, raise the productivity of firms, and raise human capital growth. Each focuses on activities that involve problem solving, with solutions being guided by signals. If AI raises the accuracy of the signals, humans will then make better decisions — individually and in groups. • Signals about tasks from AI benefit high (low)-skilled agents more when payoffs are super (sub) modular in signal precision. • AI raises the value of firm entry and shortens time for making investment or production decisions. • AI can assist managers by ranking the problems they face in order of difficulty. • Sectoral evidence relates AI to higher productivity, entries, exits, and acquisitions.