• Artificial intelligence is rapidly improving and has the potential to transform the global economy.
• Rhode Island has taken steps to position itself as a leader in AI adoption and innovation.
• The previous federal administration’s cautious approach to AI, including lawsuits against companies using AI pricing algorithms, has hindered progress.

It is no secret that artificial intelligence ‒ technology that is streamlining everyday tasks to make them faster, safer and more efficient ‒ is the future. From detecting fraud in banking to personalizing recommendations on Netflix, to improving medical diagnoses, this tech is popping up everywhere. Between 2020 and 2024, AI models created by OpenAI ‒ the company that develops much of today’s AI technology ‒ were able to improve their score from 0% to 5% on a benchmark test that compares AI intelligence to human intelligence. Going from 5% to 76% took just a few months. With additional computational resources, that same model (OpenAI’s o3) scored an 88%. Whether the AI industry can keep up this breakneck pace of innovation is unclear, but even if all AI research stopped tomorrow, they are already powerful enough to transform the global economy.Rhode Island’s leaders have positioned our state well to reap its share of this global windfall. In May 2023, the state House of Representatives passed a resolution requesting that the Department of Administration and the Office of Information Technology evaluate the current use of AI and provide recommendations on expanding AI usage. 

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Nine months later, Gov. Dan McKee issued an executive order establishing an AI task force to assess AI’s risks and opportunities across various sectors, including business, education, health care and government. 

The state Senate even created a new Committee on Artificial Intelligence and Emerging Technology, which has championed a proactive approach to AI adoption as well as close collaboration with multi-state working groups to share best practices.

It’s difficult to overstate the impact AI will have in the coming years. How much more productive could we become? Estimates vary, but the consulting firm McKinsey suggests AI could add over $4 trillion to the world economy every year ‒ the equivalent of Japan’s entire GDP. 

Unfortunately, over the last four years, the federal government seemed more interested in containing AI than unleashing it. Its actions have hurt Rhode Island tremendously. Then-President Joe Biden’s 2023 executive order on AI emphasized caution over innovation, and his fellow Democrats in Congress introduced a bill to ban AI-powered pricing algorithms that help landlords set rents. Biden’s Department of Justice also pursued prosecutions that seemed designed to have a chilling effect on AI adoption. For example, the DOJ is suing software company RealPage ‒ whose technology is popular in Rhode Island ‒ for selling rental pricing software to property managers. They’ve also targeted several hotels that use similar tools to price their rooms. Federal prosecutors claim that these AI systems enable price fixing and drive up costs for renters, but all they really do is analyze existing market conditions. In the case of the rental and hotel algorithm example, if the prices are high, it’s because the housing supply is too low. There’s nothing AI can do about that, and using the technology as a scapegoat won’t solve the problem.

While President Trump rescinded Biden’s AI executive order, all these AI cases remain on the Department of Justice’s docket and are discouraging innovators in the state from helping to advance the AI revolution that their state representatives have worked so hard to foster. 

With the new president portraying himself as a champion of AI innovation, here’s hoping his new Justice Department will drop its campaign against pricing algorithms once the full leadership team ‒ including recently confirmed antitrust czar Gail Slater ‒ is fully operating. 

Rhode Island is ready to embrace the AI revolution. As soon as the DOJ take its thumb off the scale, we’ll be free to do just that ‒ and to enjoy all the benefits it brings.

Glenn Loury is the Merton P. Stoltz Professor of the Social Sciences, professor of economics, and professor of public and international affairs at Brown University.