Here Now Health is not an artificial intelligence company — but without AI, it might never have gotten off the ground.
Michelle Turner, a first-time founder working out of her Virginia Beach home, used AI tools to teach herself about startup culture, draft a business plan, and sharpen her pitch for potential investors. The company officially launched in January 2025, and today it has 16 employees and is certified in three states to offer Medicaid-funded mental health counseling to children entering the foster care system — a gap Turner recognized through her own experience as a foster parent.
“A mom of six kids who’s a first-time founder, who’s a sole female founder, should not be able to raise (venture capital). I don’t have an MBA. I don’t have these things to back me up,” Turner said. She described using AI to develop her investor pitch as “like going to a master’s level class every day from the robot. It was my startup advisor.”
Turner’s rapid rise from nonprofit manager to company chief executive is drawing attention as AI continues to reshape the broader U.S. economy. Federal Reserve officials are closely watching the technology’s potential effects on productivity, economic growth, inflation, and employment. As part of a wide-ranging review launched by new Fed Chairman Kevin Warsh, one working group is focused specifically on AI and what it could mean for productivity — a force that can allow the economy to expand more quickly with less inflation, but that can also mean fewer workers are needed to produce the same results.
Some Fed officials have already raised the prospect of an AI-driven economy with persistently higher unemployment. Other analysts have pointed to a declining share of national income going to workers and questioned whether rising returns to capital could become a defining feature of the AI era — a question with serious social and political consequences.
The competition among AI models today draws comparisons to the early days of the internet, when brands like Yahoo! and America Online raced to connect users to the web. But today’s AI tools go far beyond browsing and shopping — they can perform complex tasks, write computer code, and solve problems that once required significant human effort.
Heavy investment in data centers is fueling economic growth while also pushing up energy and labor costs in some areas. Projections for where AI leads range from widespread prosperity to mass unemployment, with banks, government agencies, and the military all working to harness — and guard against — the new technology.
“Markets are confronted with dramatically different competing narratives,” said Jean Boivin, head of the BlackRock Investment Institute, speaking at a journalist seminar on Tuesday. “We are framing this as scarcity versus abundance… Scarcity is the story of the moment” — with the AI investment surge driving up certain costs and demand for capital — but, he added, “we are also talking about abundance… We are talking about AI that can lead to significant breakthroughs… Growth that might be breaking out of a 2% world.”
John Bailey, a nonresident senior fellow at the American Enterprise Institute and an adviser to one of the firms that invested in Here Now Health, says Turner’s story is becoming more common. He helped Turner from the beginning develop the AI tools she depended on.
For small business owners, Bailey said, “things that used to take too much time or cost too much — the price to access has fallen close to zero.” He added, “It is empowering entrepreneurs to scale faster and hire people. These are not AI companies. They are traditional companies trying to deliver services but do it faster, cheaper.”
Public discussion has largely centered on AI’s capacity to eliminate jobs, with waves of tech industry layoffs linked to the technology and evidence that companies are using it to shrink back-office and clerical workforces. But Bailey said he has grown more confident that AI will change and redistribute jobs rather than simply destroy them — much as earlier waves of technological change did.
Torsten Slok, chief economist at investment firm Apollo Global Management, credits AI with a recent uptick in new business formations, saying the technology is “dramatically reducing the cost and complexity of launching a company. As these firms scale, they will create jobs.”
How it all nets out may not be clear for years.
A recent surge in job creation has eased some concern that the U.S. was already entering a period when technology would replace workers fast enough to push unemployment higher — which would mark the first time a major new general-purpose technology proved, on balance, to be a net destroyer of jobs.
Richmond Fed President Thomas Barkin said in an earlier interview this year that he is grappling with the employment risks AI may bring, but he is also struck by reports from businesses that the technology is helping ease labor shortages in certain skilled fields.
“We are all quick to see the disasters, which is about jobs getting replaced,” Barkin said. But he noted that businesses in sectors like auto repair and manufacturing “are still in a world of saying they cannot get enough workers” and are turning to AI to make their existing staff more productive.
“It is still going to be a challenge. It is a ‘rust-belt risk’” for some white-collar occupations in particular, Barkin said. But “we are not an economy that has no shortages.”
The transition, though, could be painful for many workers. The spread of global trade in the 1990s wiped out long-established U.S. manufacturing communities, and programs designed to help displaced workers find new jobs largely failed. Over time, shrinking opportunity in parts of the Midwest and South is widely seen as having contributed to a rightward political shift and a rise in so-called “deaths of despair” tied to substance abuse.
Researchers warn a similar disruption may now be building for workers in clerical, administrative, and related roles — particularly those without college degrees who depend on work experience to advance. A study by the Brookings Institution and Opportunity@Work found roughly 23 million people whose most logical career step would take them into jobs highly exposed to AI replacement, effectively putting them at risk of being stuck in lower-paying positions.
“Disruptions in these roles can have outsized effects on workers’ ability to move into higher-wage work,” the researchers wrote, with the heaviest regional impacts expected in Florida, the Northeast, Texas, and California — a different geographic footprint than the manufacturing disruption of earlier decades.
For the Federal Reserve, both the ultimate outcome and the speed of the AI transition will matter, as near-term effects could look very different from long-run results — especially if a major productivity boom eventually materializes.
At his first press conference, Fed Chairman Warsh called AI the most significant economic shift “that we’ve had in my adult lifetime” and said the U.S. “is ultimately going to be better off” as a result.
But, he cautioned, “that certainly doesn’t mean it’s not going to be disruptive.”
