How much would someone have to pay you to give up every generative AI tool for a month? For the typical American, the answer is about $11. But one in eight people wouldn’t give up AI for a month even if you paid them $500.

In this solo episode, David Deming suggests that might be the most interesting statistic in economics right now - because almost none of the value people say they are getting from AI appears in GDP numbers.

Everybody focuses on how AI will affect jobs and productivity in the workplace. Those are important questions, but they are missing a big part of the story, which is the impact on our personal lives. Is AI saving you time at home? Helping you make better decisions? Is it making you happier? These consumer welfare gains aren’t directly priced in the market. Right now, almost all of that hidden value is flowing to you for free because consumers pay little to nothing for AI tools. David works through consumer surplus, GDP-B, the worth of Wikipedia, Facebook, smartphone cameras, and generative AI, and explains why the era of free AI might be over soon.

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