Power and Prediction: The Disruptive Economics of Artificial Intelligence

Ajay Agrawal, Joshua Gans, Avi Goldfarb

AI / Economics

The follow-up to Prediction Machines, this book argues that AI's most disruptive economic effect is not incremental productivity gain but the redistribution of decision-making power—from experts and institutions to the systems that predict and the people who control them. Grounded in economics research and illustrated with cases from medicine, law, and finance, it provides a rigorous framework for the market analysis questions the AI Canon's final section raises. A16z's market-analysis section repeatedly asks where value accrues in the AI stack; this book provides the economic theory behind those questions.