Fed Governor Barr on American Inequality and the Future of AI

Federal Reserve Governor Michael S. Barr said AI could prove capital-biased innovation whose returns flow mainly to capital, warning that concentrated market power among hyperscalers and frontier AI labs could widen U.S. wealth inequality. Citing the Fed's 2025 Survey of Consumer Finances, he noted the top 10 percent of households hold nearly three-fourths of all wealth while the bottom half hold about 2 percent, and the labor share of national income fell to a record low of 52.8 percent in the second quarter of 2026. He said displacement by AI remains limited so far and competition has kept access broad, but argued society should start addressing these risks while adoption is still early.