Generative AI and Firm Values

Andrea Eisfeldt, Gregor Schubert and Miao Ben Zhang

No 31222, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: How do recent advances in Generative AI affect firm value? We construct the first measure of firms’ workforce exposures to Generative AI and show that an “Artificial-Minus-Human” (AMH) portfolio earned 5% in the two weeks following the release of ChatGPT. The labor-exposure effect is more pronounced for firms with greater data assets and is distinct from the effect of firms’ product exposures to AI. We assess whether exposed workforces are substituted or complemented by Generative AI based on whether their exposed tasks are core or supplemental. Examining firms’ labor demand and profitability following the release of ChatGPT supports a labor-technology substitution channel.

JEL-codes: E0 G0 (search for similar items in EconPapers)
Date: 2023-05
New Economics Papers: this item is included in nep-bec, nep-big, nep-fmk and nep-tid
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