Yet, while we often hear about the boundless promise of AI – as we should – we also need to pay more attention to the careers, lives and communities it will disrupt, including those who have so far been left out. For example, according to a recent McKinsey study, Black Americans are 10% more likely to be working jobs slated for AI automation. In addition, the same study anticipates that AI will disrupt 4.5 million jobs for Black workers. This disruption has the potential to impact billions of dollars in Black economic potential and growth. If current trends hold, the new wealth created by GenAI alone will increase the racial wealth gap by $43 billion annually, according to McKinsey.
We have already seen firsthand how the rapid adoption of technology can exacerbate gaps and create new divides. One only needs to look at the creation and adoption of computers and the internet. In 1987, economist Robert Solow famously claimed that “you can see the computer age everywhere but in the productivity statistics.” Today, we almost take for granted how much productivity the digital age has brought. But, that digital age has also created a digital divide, which exacerbates racial economic gaps. And, one of the legacies of failing to address this digital divide and ensure broadband access to Black and other communities without access to resources and opportunities has been limited engagement with these tools.
How to prevent the another wealth gap
As we stand at the beginning of this next revolution in AI and its early waves of value creation, our urgent task is to prevent another gap. We can do that by empowering all people to take part and be leaders in this evolving field, allowing our economy to reap greater benefits. That begins with infrastructure that supports AI enablement for all, including education on AI tools, access to the internet and power to compute.
One model for this is the work being done by Student Freedom Initiative (SFI). As a first step, we must commit to eliminating the existing digital broadband divide. SFI has been working hard to close the digital divide in Black communities, including Historically Black Colleges and Universities (HBCUs), 82% of which reside in broadband deserts. This is a critical gap that must be closed to provide the next generation of diverse leaders with the resources, education and technical access needed to master this evolving tech.
We must also double our efforts to provide education around these tools. A combination of critical thinking and technical skills is increasingly becoming a prerequisite for effectively interacting with GenAI. Our education system, particularly secondary and higher education institutions, must play a key role in equipping students with these essential skills.
In partnership with Stats Perform, a global leader in AI solutions for the sports industry and a portfolio company of my global investment firm, Vista Equity Partners, SFI launched an “AI in Basketball” course at Morehouse College last year. This course provided hands-on instruction in AI-use cases, which helped prepare those students to be leaders in this field. It also offered students internship opportunities to use what they learned in a real-world setting, allowing them to build experience and competitive resumes for AI careers. Soon, we will be expanding these courses to other HBCUs, creating on-ramps to this growing industry.
Another notable example of this is the work being done at internXL, which offers opportunities like free training and certifications in artificial intelligence, data science, and machine learning, including access to over 500 AI training courses. The internXL initiative also connects highly-qualified HBCU students with AI experts and employers for internships, enabling them to gain practical experience in the field. And internships are critical – studies show that an internship at a hiring organization, or in the same field, are among the highest differentiators used in choosing between qualified candidates. This work is bridging access gaps and ensuring that underrepresented talent thrives in the rapidly growing and in-demand field of AI.
Finally, we must also ensure widespread access to compute, or processing power, to run these new tools and their applications. If we use the example of smartphones, compute was made possible thanks to telecommunication organizations updating their infrastructure to handle 4G, 5G and LTE – all of which have been underinvested in across Black communities. If we want to fully harness the potential impact of AI on our economy, all communities need to have access to these tools and the infrastructure that underpins the technology. This includes computing power, requisite energy sources, and large language models and other machine learning and reasoning tools.
Economic toll
We know that the racial wealth gap will cost the U.S. economy $1 trillion to $1.5 trillion between 2019 and 2028. Imagine what it would mean for the economy if we took steps to prevent AI from becoming a new economic wedge, and it, instead, became a prolific source of generational wealth. What if we were able to ensure access to these tools for communities around the globe? So long as we take appropriate steps to prevent these tools from mimicking and reinforcing racial biases, the innovation and economic growth this would spur has the potential to close many gaps, generating prosperity for all.
With AI’s current trajectory, there will be three distinct waves of opportunity through which value will be captured. We are already seeing the first wave of value creation benefiting hardware vendors. The second wave will go to super scalers like Microsoft, Google, Oracle and other large companies that have the ability to broadly offer connectivity to compute. The third wave will benefit enterprise software vendors who provide AI and GenAI solution sets on top of their existing products. These are three distinct verticals where we must focus our equity efforts to impact the long-term growth of AI and GenAI.
The good news is that, unlike the digital revolution, we have the luxury of foresight. As AI evolves and established companies and new start-ups scale products, develop features and capture value at each stage, we must commit ourselves to ensuring that everyone has access to the incredible benefits of AI. If we fall short, we will not be equipped, nor able, to fully harness and unlock its potential. As we stand at these crossroads, we must think expansively and act decisively to ensure we build the infrastructure to support AI and GenAI enablement.
Robert F. Smith is the founder, chairman and CEO of Vista Equity Partners. He serves as chairman of Student Freedom Initiative (SFI) and Carnegie Hall, founding director and president of the Fund II Foundation and co-lead of Southern Communities Initiative (SCI). In 2019, Smith eliminated the student debt of approximately 400 Morehouse College graduates and was named one of TIME 100’s Most Influential People in 2020.
Andersen Ross Photography Inc | Digitalvision | Getty Images
Wall Street is warning that the U.S. Department of Education’s crack down on student loan repayments may take billions of dollars out of consumers’ pockets and hit low income Americans particularly hard.
The department has restarted collections on defaulted student loans under President Donald Trump this month. For first time in around five years, borrowers who haven’t kept up with their bills could see their wages taken or face other punishments.
Using a range of interest rates and lengths of repayment plans, JPMorgan estimated that disposable personal income could be collectively cut by between $3.1 billion and $8.5 billion every month due to collections, according to Murat Tasci, senior U.S. economist at the bank and a Cleveland Federal Reserve alum.
If that all surfaced in one quarter, collections on defaulted and seriously delinquent loans alone would slash between 0.7% and 1.8% from disposable personal income year-over-year, he said.
This policy change may strain consumers who are already stressed out by Trump’s tariff plan and high prices from years of runaway inflation. These factors can help explain why closely followed consumer sentiment data compiled by the University of Michigan has been hitting some of its lowest levels in its seven-decade history in the past two months.
“You have a number of these pressure points rising,” said Jeffrey Roach, chief economist at LPL Financial. “Perhaps in aggregate, it’s enough to quash some of these spending numbers.”
Bank of America said this push to collect could particularly weigh on groups that are on more precarious financial footing. “We believe resumption of student loan payments will have knock-on effects on broader consumer finances, most especially for the subprime consumer segment,” Bank of America analyst Mihir Bhatia wrote to clients.
Economic impact
Student loans account for just 9% of all outstanding consumer debt, according to Bank of America. But when excluding mortgages, that share shoots up to 30%.
Total outstanding student loan debt sat at $1.6 trillion at the end of March, an increase of half a trillion dollars in the last decade.
The New York Fed estimates that nearly one of every four borrowers required to make payments are currently behind. When the federal government began reporting loans as delinquent in the first quarter of this year, the share of debt holders in this boat jumped up to 8% from around 0.5% in the prior three-month period.
To be sure, delinquency is not the same thing as default. Delinquency refers to any loan with a past-due payment, while defaulting is more specific and tied to not making a delayed payment with a period of time set by the provider. The latter is considered more serious and carries consequences such as wage garnishment. If seriously delinquent borrowers also defaulted, JPMorgan projected that almost 25% of all student loans would be in the latter category.
JPMorgan’s Tasci pointed out that not all borrowers have wages or Social Security earnings to take, which can mitigate the firm’s total estimates. Some borrowers may resume payments with collections beginning, though Tasci noted that would likely also eat into discretionary spending.
Trump’s promise to reduce taxes on overtime and tips, if successful, could also help erase some effects of wage garnishment on poorer Americans.
Still, the expected hit to discretionary income is worrisome as Wall Street wonders if the economy can skirt a recession. Much hope has been placed on the ability of consumers to keep spending even if higher tariffs push product prices higher or if the labor market weakens.
LPL’s Roach sees this as less of an issue. He said the postpandemic economy has largely been propped up by high-income earners, who have done the bulk of the spending. This means the tide-change for student loan holders may not hurt the macroeconomic picture too much, he said.
“It’s hard to say if there’s a consensus view on this yet,” Roach said. “But I would say the student loan story is not as important as perhaps some of the other stories, just because those who hold student loans are not necessarily the drivers of the overall economy.”
A woman walks in an aisle of a Walmart supermarket in Houston, Texas, on May 15, 2025.
Ronaldo Schemidt | Afp | Getty Images
U.S. consumers are becoming increasingly worried that tariffs will lead to higher inflation, according to a University of Michigan survey released Friday.
The index of consumer sentiment dropped to 50.8, down from 52.2 in April, in the preliminary reading for May. That is the second-lowest reading on record, behind June 2022.
The outlook for price changes also moved in the wrong direction. Year-ahead inflation expectations rose to 7.3% from 6.5% last month, while long-term inflation expectations ticked up to 4.6% from 4.4%.
However, the majority of the survey was completed before the U.S. and China announced a 90-day pause on most tariffs between the two countries. The trade situation appears to be a key factor weighing on consumer sentiment.
“Tariffs were spontaneously mentioned by nearly three-quarters of consumers, up from almost 60% in April; uncertainty over trade policy continues to dominate consumers’ thinking about the economy,” Surveys of Consumers director Joanne Hsu said in the release.
Inflation expectations are closely watched by investors and policymakers. Federal Reserve Chair Jerome Powell has said the central bank wants to make sure long-term inflation expectations do not rise because of tariffs before resuming rate cuts.
A final consumer sentiment index for the month is slated to be released on May 30, and will likely be closely watched to see if the tariff pause led to an improvement in sentiment.
This is breaking news. Please refresh for updates.
Jamie Dimon, chief executive officer of JPMorgan Chase & Co., speaks during the 2025 National Retirement Summit in Washington, DC, US, on Wednesday, March 12, 2025.
Al Drago | Bloomberg | Getty Images
Wall Street titan Jamie Dimon said Thursday that a recession is still a serious possibility for the United States, even after the recent rollback of tariffs on China.
“If there’s a recession, I don’t know how big it will be or how long it will last. Hopefully we’ll avoid it, but I wouldn’t take it off the table at this point,” the JPMorgan Chase CEO said in an interview with Bloomberg Television.
Specifically, Dimon said he would defer to his bank’s economists, who put recession odds at close to a toss-up. Michael Feroli, the firm’s chief U.S. economist, said in a note to clients on Tuesday that the recession outlook is “still elevated, but now below 50%.”
Dimon’s comments come less than a week after the U.S. and China announced that they were sharply reducing tariffs on one another for 90 days. The U.S. has also implemented a 90-day pause for many tariffs on other nations.
Thursday’s comments mark a change for Dimon, who said last month before the China truce that a recession was likely.
He also said there is still “uncertainty” on the tariff front but the pauses are a positive for the economy and market.
“I think the right thing to do is to back off some of that stuff and engage in conversation,” Dimon said.
However, even with the tariff pauses, the import taxes on goods entering the United States are now sharply higher than they were last year and could cause economic damage, according to Dimon.
“Even at this level, you see people holding back on investment and thinking through what they want to do,” Dimon said.
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