White hard hat held in the crook of a person’s arm with technology icons superimposed symbolizing AI advance and sautomation of manufacturing processes using computers and electronics. – metamorworks // Shutterstock
With the enactment of the One Big Beautiful Bill pushing America’s debt-to-GDP ratio further into dangerous territory, a sudden political pivot towards fiscal discipline seems unlikely. Policy-makers have made it abundantly clear that they are not going to stop spending.
Economists have responded by projecting our debt/GDP levels will go from nearly 100% today to 120%+ over the next 10 years. Only countries like Italy, Greece, Sudan, and Japan are in a worse position. The market’s response? Long-term interest rates are at the highest level in nearly 20 years, impacting mortgage rates, the cost of student loans, and corporations’ ability to borrow money and create jobs.
Key Takeaways
AI productivity gains could solve America’s mounting federal debt crisis through GDP growth.
Artificial intelligence delivers disinflationary pressure while boosting tax revenues and economic output.
U.S. debt-to-GDP ratio approaching 120% requires AI-driven productivity revolution for stabilization.
Technology innovation creates net job growth despite automation, with 78 million new roles projected.
With the enactment of the One Big Beautiful Bill pushing America’s debt-to-GDP ratio further into dangerous territory, a sudden political pivot towards fiscal discipline seems unlikely. Policy-makers have made it abundantly clear that they are not going to stop spending.
Economists have responded by projecting our debt/GDP levels will go from nearly 100% today to 120%+ over the next 10 years. Only countries like Italy, Greece, Sudan, and Japan are in a worse position. The market’s response? Long-term interest rates are at the highest level in nearly 20 years, impacting mortgage rates, the cost of student loans, and corporations’ ability to borrow money and create jobs.
Debt to GDP ratio chart. – Range
With no spending restraint in sight, the most compelling argument for optimism lies not in Washington but in Silicon Valley—and increasingly, in every sector of the economy that’s beginning to harness artificial intelligence.
Range sees one credible path to stabilize this debt burden and put a ceiling on long-term rates: AI-driven productivity gains.
Just like in any household, Americans can afford to spend more as a country if they’re making more income. AI-driven increases in productivity could accelerate GDP growth while also reducing inflation and bringing down interest rates. Higher growth and lower interest rates as a result of AI could be a panacea for the markets.
Here’s some context on the relationship between productivity and GDP. While there are several models to measure and forecast GDP, a simple one that the Congressional Budget Office uses for its own long-term GDP projections assumes:
Real GDP Growth = Labor Growth(x labor contribution) + Capital Growth(x capital contribution) + Productivity
Of these variables, changes in productivity have the largest impact on GDP growth. Technological innovation has been the driver of productivity over the course of history.
Artificial Intelligence is not an incremental innovation—this is not akin to going from 4G to 5G cellular service. AI is a general-purpose technology revolution on par with the steam engine, electricity, or the internet itself.
Groundbreaking technology like this one has a way of setting the economy into hyperdrive. From the 1970s to the early 1990s, productivity growth languished below 1%. Then came the dot-com revolution, and productivity exploded toward 2%. That technological shift played a key role in creating a virtuous economic cycle that helped drive the budget surpluses of the late 1990s.
The AI productivity thesis works through multiple channels:
Direct Economic Growth: AI-driven productivity gains can translate directly into higher GDP. When the same inputs produce more output, the economy grows faster without requiring additional resources.
Increased Tax Revenues: Higher productivity usually leads to higher corporate profits, wages, and economic activity—all of which generate increased tax receipts. More government revenue means less need to borrow.
Disinflationary Pressure: Less government borrowing leads to lower inflationary pressure. In addition, productivity improvements reduce the cost of producing goods and services, which slows down inflation.
Improved Debt Dynamics and Lower Rates: Lower inflation allows the Federal Reserve to maintain a more accommodative monetary policy. In addition to stimulating the economy through cheaper borrowing costs, lower interest rates allow the government to spend less on interest expense and redeploy those funds back into the private sector instead, further stimulating the economy.
AI driven productivity growth chart. – Range
A combination of higher GDP and lower debt growth improves the debt-to-GDP ratio from both sides of the equation. If AI delivers even modest incremental productivity gains of 1-1.5% annually, the U.S. could potentially maintain or reduce current debt-to-GDP levels despite continued spending growth.
This isn’t far-fetched—there are already measurable productivity improvements as AI tools become integrated across industries. As AI adoption increases, these productivity gains could permeate through the economy and allow the U.S. to “grow its way” out of the current fiscal hole it’s in even if the spending addiction is never addressed.
The potential positives of AI-led productivity are meaningful, but at what cost will Americans see these benefits? Many want to know: “Will AI take our jobs?”
If history is any guide, the answer is…“probably”. In the early 1800s, around 70% of the population was employed in agriculture. Today, on-farm workers represent less than 2% of the workforce. Similarly, in the 1950s, around 30% of workers were employed in manufacturing jobs. Today, that number is less than 10%
But throughout history, when technological innovation eliminates jobs, it creates new ones as well. Remarkably, 60% of the jobs people are employed in today didn’t exist in 1940. That means nearly 90% of employment growth over the last 80 years resulted from technology creating entirely new categories of work.
This pattern is already emerging with regard to AI. Companies are beginning to hire prompt engineers, AI ethicists, and image annotators who train machine learning models. At Range, we’ve hired CFPs, CPAs, and CFAs as critical subject matter experts working alongside our engineers to help build and validate our AI-powered technology. These aren’t traditional roles—they represent the emergence of new types of knowledge workers who combine domain expertise with technological fluency.
In aggregate, while technological innovation has led to significant gains in productivity, there are more people employed today than ever, and the unemployment rate is low by historic standards. The World Economic Forum’s Future of Jobs Report estimates macrotrends like artificial intelligence and related technologies will create 170 million new jobs globally by 2030, while displacing 92 million existing roles, signaling a net gain of 78 million new roles this decade. In spite of fear-mongering often seen from the media, the country could see the advancement of AI bolster job growth as opposed to derailing it.
The path outlined may not be linear. AI-led productivity gains might take longer to materialize than anticipated, or could initially be concentrated in fewer sectors than hoped. Markets may struggle to price the timing and magnitude of AI’s impact on productivity while grappling with current fiscal realities. In the meantime, elevated rates and other inflationary pressures may hamper economic growth and tighten access to capital markets, delaying the innovation cycle.
Disruption is also expected with a volatile transition period. Not everyone will benefit at the same time or in the same way. For every “AI Winner”, there may be a Kodak or a Best Buy—companies that don’t make it along the way. Furthermore, ensuring these productivity gains translate into broad-based wage growth will be critical. If the benefits are concentrated among a small number of firms and capital owners, it could exacerbate different societal challenges.
But people are already witnessing the very real positive effects AI is having on some of the world’s largest and most impactful companies. These organizations are demonstrating measurable increases in productivity and capacity while simultaneously lowering operational costs—and markets are rewarding these improvements with significant share value appreciation.
The debt problem is real, and lawmakers are not acting to address it. But rather than resigned pessimism, the AI revolution offers a plausible path toward economic growth that could outpace our debt accumulation. Technological innovation has historically provided solutions when political processes have reached impasses, and that could be exactly what bails us out.
For investors navigating today’s technological and fiscal climate, it’s as important as ever to have diversified portfolios. However, maintaining significant exposure to U.S. markets is key—a growing deficit should not deter this. The U.S. has commanding advantages in AI and tech development: It is a global leader in R&D spending and houses the majority of the world’s top AI researchers. The largest and most innovative technology companies remain U.S.-based and continue posting impressive growth rates. It’s important to maintain exposure to these extraordinary businesses.
The question here isn’t whether AI will transform the economy—that’s already happening. The question is whether this transformation will occur quickly and broadly enough to provide the productivity growth needed to save our economy from potentially falling into a debt spiral. Based on current trajectories, there’s substantial reason for optimism.
A computer generated image of what the lunar vehicle could look like on the Moon
In a shopping plaza an hour outside Toronto, flanked by a day spa and a shawarma joint, sits a two-storey building with blue tinted windows reflecting the summer sun.
It is the modest headquarters of Canadensys Aerospace, where Canada is charting its first trip to the Moon.
Canadensys is developing the first-ever Canadian-built rover for exploring the Earth’s only natural satellite, in what will be the first Canadian-led planetary exploration endeavour.
Models, maps and posters of outer space line the office walls, while engineers wearing anti-static coats work on unfamiliar-looking machines.
Sending this rover to the Moon is part of the company’s “broader strategy of really moving humanity off the Earth”, Dr Christian Sallaberger, Canadensys’ president and CEO, told the BBC.
Learning about the Moon – which is seen to have the potential to become a base for further space exploration – is the “logical first step”, he said.
“People get all excited about science fiction films when they come out. You know, Star Wars or Star Trek. This is the real thing.”
Prototypes of the lunar rover, both designed and built by Canadensys
The Canadian vehicle is part of Nasa’s Artemis programme, which aims to establish a sustainable human presence on the Moon.
As part of that overarching goal, this rover aims to find water and measure radiation levels on the lunar surface in preparation for future manned missions, and survive multiple lunar nights (equivalent to about 14 days on Earth).
The rover will also demonstrate Canadian technology, building on Canada’s history in space.
Canada was the third country to launch a satellite, designed the Canadarm robotic arms for the Space Shuttle and the International Space Station, and is known for astronauts such as Chris Hadfield and Jeremy Hansen – the latter of whom will orbit the Moon on the Artemis II mission next year.
The 35kg rover is scheduled to be launched as part of a Nasa initiative in 2029 at the earliest. It will land on the Moon’s south polar region – one of the most inhospitable places on the lunar surface.
The vehicle does not have a name yet. The Canadian Space Agency held an online competition to select one, and is expected to announce the winner in the future.
Canadensys President Christian Sallaberger said he is excited to be playing a role in humanity’s quest to explore space
Canadensys is currently working on several prototypes of the rover. The final vehicle, Mr Sallaberger said, would be assembled shortly before launch.
Each component is tested to ensure it can survive the Moon’s harsh conditions.
Temperature is one of the main obstacles. Lunar nights can plummet to -200C (-328F) and rise to a scorching daytime of 100C (212F).
“It’s one of the biggest engineering challenges we have because it’s not so much even surviving the cold temperature, but swinging between very cold and very hot,” he said.
Designing the wheels is another challenge, as the Moon’s surface is covered with a sticky layer of fragmented rock and dust called regolith.
“Earth dirt, if you look at it microscopically, has been weathered off. It’s more or less in a round shape; but on the Moon the lunar dirt soil is all jagged,” Mr Sallaberger said.
“It’s like Velcro dirt,” he said, noting it “just gums up mechanisms”.
Engineers Misha Hartmann (L) and Adam Abdulahad work on a prototype of the rover at the Canadensys headquarters
The search for water on the lunar surface is especially exciting, considering the Moon was generally thought to be bone dry following the Apollo missions in the 1960s and 70s, the US human spaceflight programme led by Nasa.
That perception changed in 2008, Dr Gordon Osinski, the mission’s chief scientist, told the BBC, when researchers re-analysed some Apollo mission samples and found particles of water.
Around the same time, space crafts observing the Moon detected its presence from orbit.
It has yet to be verified on the ground and many questions remain, the professor at Western University in London, Ontario, said.
“Is it like a patch of ice the size of this table? The size of a hockey rink? Most people think, like in the Arctic, it’s probably more like grains of ice mixed in with the soil,” he said.
Water on the Moon could have huge implications for more sustainable exploration. He noted one of the heaviest things they need to transport is often water, so having a potential supply there would open doors.
Water molecules can also be broken down to obtain hydrogen, which is used in rocket fuel. Mr Osinski described a future where the Moon could become a sort of petrol station for spacecrafts.
“It gets more in the realms of sci- fi,” he said.
Dr Osinski, an expert in lunar geology and has experience training astronauts in Canada’s Arctic, showed off a lunar rock during the BBC interview
Canada has wanted to build a lunar surface vehicle for decades, with talk of a Canadian-made spacecraft even in the early 2000s – but it was not until 2019 that concrete plans were announced.
Canadensys was awarded the C$4.7m ($3.4m; £2.5m) contract three years later.
Founded in 2013, Canadensys has worked on a variety of aerospace projects for organisations like Nasa and the Canadian Space Agency, as well as commercial clients.
More than 20 instruments built by the company have been used in a host of missions on the Moon.
But there are challenges ahead – as even landing on the Moon is no easy feat.
In March, a spacecraft by commercial US firm Intuitive Machines toppled over onto its side during landing, ending the mission prematurely.
Three months later, Japanese company iSpace’s Resilience lost touch with Earth during its landing, and eventually failed.
“That’s the nature of the business we’re in,” Mr Sallaberger said. “Things do go wrong, and we try to do the best we can to mitigate that.”
Intuitive Machines/The Planetary Society
A picture of the Earth taken by a Canadensys-built camera was selected as the Best Space Exploration Image of 2024 by the Planetary Society
Space exploration has been a collaborative field over the years, with countries – even rivals, such as the United States and Russia – working together on the International Space Station.
But that might be changing, Mr Osinski said. As the prospect of a permanent presence on the Moon becomes more realistic, wider geopolitical questions have begun to swirl around the ownership of the satellite.
“There’s more talk around who owns the Moon and space resources,” Mr Osinski said.
In 2021, the US passed a law to protect the Apollo Moon landing site “because they had a concern that China could just go and grab the US flag, or take a piece of an Apollo lander”, he said.
But he had some encouraging words about the Artemis missions, which are “even way more international than the space station”.
The Artemis Accords, which is a set of ideals to promote sustainable and peaceful exploration of outer space, has been signed by more than 50 countries – including ones like Uruguay, Estonia and Rwanda, which are not traditionally seen as key space race nations.
Space is also becoming more accessible. Private companies like SpaceX and Blue Origin have taken an increasingly important role and are able to take anyone with the money and barely any training – like Amazon founder Jeff Bezos and pop star Katy Perry – into space for a few minutes.
But the Moon is the Holy Grail, as it opens up all sorts of possibilities.
Mr Sallaberger said that Canadensys is involved in longer-term projects, such as lunar greenhouses for food production.
Those still remain many years in the future, but the rover is a starting point.
“If you design something that can survive on the lunar surface long-term, you’re pretty bulletproof anywhere else in the solar system.”
A team of researchers at Maharshi Dayanand University (MDU), Rohtak, has developed an artificial intelligence (AI)-based tool capable of detecting diseases and nutrient deficiencies in bitter gourd leaves, potentially transforming the way farmers monitor crop health.
The study, recently published in the peer-reviewed journal ‘Current Plant Biology’ (Elsevier), highlights how AI-driven innovations can play a crucial role in real-time crop monitoring and precision farming.
The newly developed web-based application, named ‘AgriCure’, is powered by a layered augmentation-enhanced deep learning model. It allows farmers to diagnose crop health by simply uploading or capturing a photograph of a leaf using a smartphone.
“Unlike traditional methods, which are time-consuming and often require expert intervention, AgriCure instantly analyses the image to determine whether the plant is suffering from a disease or nutrient deficiency, and then offers corrective suggestions,” explained the researchers.
The collaborative research project was led by Dr Kamaldeep Joshi, Dr Rainu Nandal and Dr Yogesh Kumar, along with students Sumit Kumar and Varun Kumar from MDU’s University Institute of Engineering and Technology (UIET). It also involved Prof Narendra Tuteja from the International Centre for Genetic Engineering and Biotechnology (ICGEB), New Delhi and Prof Ritu Gill and Prof Sarvajeet Singh Gill from MDU’s Centre for Biotechnology.
MDU Vice-Chancellor, Prof Rajbir Singh, congratulated the research team on their achievement.
According to the researchers, AgriCure can detect major diseases such as downy mildew, leaf spot, and jassid infestation, as well as key nutrient deficiencies like nitrogen, potassium and magnesium.
“This represents a step towards sustainable agriculture, where AI empowers farmers with real-time decision-making tools,” said corresponding authors Prof Ritu Gill and Prof Sarvajeet Singh Gill. They added that the web-based platform can be integrated with mobile devices for direct use in the field.
The team believes that the technology’s core framework can be extended to other crops such as cereals, legumes, and fruits, creating opportunities for wider applications across Indian agriculture.
Looking ahead, they plan to integrate AgriCure with drones and Internet of Things (IoT) devices for large-scale monitoring, and to develop lighter versions of the model for full offline use on mobile phones.
Competition to introduce AI to the diplomatic front lines of major countries The U.S. actively utilizes the State Department’s exclusive “State Chat” to brainstorm foreign policy. Canada uses it to analyze major countries’ policies
[Photo = Yonhap News]
Competition to introduce artificial intelligence (AI) is fierce not only in industrial areas but also in diplomacy, which is the front line of competition between countries. The U.S. State Department is increasing the work efficiency of diplomats through its own AI. Japan spends more than 600 billion won a year to detect false information. The move is aimed at preventing the possibility that fake information will be misused to establish national diplomatic strategies.
In the United States, the State Department has been operating its own AI ‘State Chat’ since last year. It is an interactive AI in the form of ‘Chat GPT’, similar to the method promoted by the Korean Ministry of Foreign Affairs. It provides functions such as summarizing internal business documents and professional analysis. E-mails used by diplomats are also drafted according to the format and even have the function of helping “brainstorming” in relation to foreign policy or strategy.
StateChat is dramatically reducing the amount of time State Department employees spend on mechanical tasks. According to State Department estimates, the total amount of time saved by all employees through their own AI amounts to 20,000 to 30,000 hours per week.
The State Department plans to continue expanding the use of StateChat. State Chat is also used for job training. This is due to the advantage of minimizing information that may be omitted during the handover process and enabling in-depth learning by providing data containing stories. State Chat will also be used to manage manpower. Information related to personnel management is also entered in State Chat.
[Photo = Yonhap News]
Japan has been building a situation analysis system using AI since 2022. AI finally judges the situation by combining reports from local diplomats with external information such as foreign social network service (SNS) posts, reports from research institutes, and media reports. For example, if social media analysis detects residents’ disturbance in a specific area, AI warns of the risk of terrorism or riots.
From 2023, it is using AI to detect fake news that is mainly spread through SNS. It analyzes not only text but also various media types of content such as images, audio, and video. It is a method of measuring the consistency of information based on a large language model (LLM) and then determining whether it is false. In particular, Japan calculates and presents the social impact, such as the scale and influence of the fake news.
Japan believes that numerous fake news after the Fukushima nuclear power plant accident has undermined national trust and caused unnecessary diplomatic friction. Japan allocated about 66.2 billion yen (626.5 billion won) in the fiscal 2025 budget to the policy and technology sectors to respond to false information.
Canada introduced a ‘briefing note’ using Generative AI in 2022. A draft policy briefing document is created by analyzing and reviewing policy-related data of major countries. Finland operates a system that collects diplomatic documents through AI and summarizes them on its own, and even visualization functions are provided. The UK has introduced AI to consular services. Classify the services frequently requested by their citizens staying abroad to overseas missions and provide optimal answers.
Last year, France developed an AI tool that summarizes and analyzes diplomatic documents and external data and is using it to detect ‘reverse information (fake news or false information)’ overseas and to identify public opinion trends. The United Arab Emirates (UAE) has introduced an unmanned overseas mission model that provides consular services based on AI.
![[Photo = Yonhap News]](https://aistoriz.com/wp-content/uploads/2025/08/news-p.v1.20250831.e738e78a131544a38de88cd64aaced2a_P1.jpg)
