AI risks could repeat China shock that cost jobs, former US commerce chief Raimondo warns

Former US Commerce Secretary Gina Raimondo has warned that the rapid development of artificial intelligence (AI) could cause significant disruptions to the US economy, reminiscent of the "China shock" that displaced American workers in the past. At the Bloomberg New Economy Forum in New Delhi, Raimondo compared AI's potential impact on American jobs to the economic destabilization caused by massive Chinese manufacturing imports in the US.

She emphasized the need to prepare the workforce for technology that could potentially put people out of work.

The term "China shock" refers to the economic and labor market disruption in the US caused by a surge of cheap Chinese imports, leading to job losses in manufacturing across US factories. This ultimately contributed to divisive politics and populism, according to Raimondo. Her warning comes as discussions on emerging AI technology took center stage during the first day of the 2026 edition of the Bloomberg New Economy Forum.

While some speakers argue that AI has the potential to reshape the global economy, others, like US Federal Reserve Governor Christopher Waller, caution that the investment boom could already be contributing to inflationary pressures. Waller noted that hyperscalers are competing to build more data centers to power AI models, leading to increased demand for semiconductors and other products, thus causing inflation.

Blackstone's President and COO, Jonathan Gray, argued that AI would fundamentally transform how consumers, businesses, and governments operate, comparing its impact to the industrial revolution in the late 19th century. He highlighted the growing investment required to develop AI, noting that technology companies are pouring billions into data centers, computing infrastructure, and electricity generation to support advanced AI models.