Robert Smith of Vista: Strategies for mitigating AI's impact on racial wealth disparities

The growth of AI has been remarkable in terms of speed and influence. Goldman Sachs predicts that AI investment in the U.S. will reach $100 billion and $200 billion worldwide by next year. In private equity, generative AI (GenAI) investments reached $2.18 billion last year, which is double the amount from the previous year.

While AI holds great potential, we must also consider the potential disruptions it may cause, particularly for marginalized communities. A recent McKinsey study found that Black Americans are 10% more likely to work jobs at risk of automation. This study also predicts that AI will displace 4.5 million jobs for Black workers, which could have a significant impact on their economic potential and growth. If current trends continue, the new wealth generated by GenAI could exacerbate the racial wealth gap by $43 billion annually, according to McKinsey.

The adoption of technology has widened the gap and created new divides, as seen in the creation and adoption of computers and the internet. In 1987, economist Robert Solow claimed that "you can see the computer age everywhere but in the productivity statistics." Today, we take for granted the productivity brought by the digital age. However, this digital age has also created a digital divide, which exacerbates racial and economic gaps. Failing to address this digital divide and ensure broadband access to Black and other communities without resources and opportunities has resulted in limited engagement with these tools.

How to prevent the another wealth gap

To prevent another gap in the next AI revolution, we must empower all individuals to participate and lead in this evolving field. This can be achieved by providing infrastructure that supports AI enablement, such as education on AI tools, internet access, and computational power. By doing so, our economy will benefit greatly.

To ensure that the next generation of diverse leaders has access to the resources, education, and technical skills needed to excel in the rapidly evolving tech industry, we must first address the critical gap in broadband access, particularly in Black communities, including Historically Black Colleges and Universities (HBCUs), where 82% of students reside in broadband deserts. The Student Freedom Initiative (SFI) has been working tirelessly to close this digital divide and provide equitable access to technology and education.

To effectively engage with GenAI, students must acquire a combination of critical thinking and technical skills. As such, our education system, specifically secondary and higher education institutions, must prioritize teaching these skills.

In collaboration with Stats Perform, a prominent AI solutions provider for the sports industry and a portfolio company of Vista Equity Partners, SFI introduced an "AI in Basketball" course at Morehouse College last year. This course provided practical training in AI-based applications, equipping students to become leaders in this field. Additionally, the course offered students internships to apply their knowledge in a real-world setting, enhancing their resumes and preparing them for AI careers. We plan to expand these courses to other HBCUs, providing entry points to this burgeoning industry.

The internXL initiative provides opportunities for HBCU students to gain practical experience in AI through internships with experts and employers. This work is critical in bridging access gaps and ensuring that underrepresented talent thrives in the rapidly growing and in-demand field of AI.

To maximize the impact of AI on our economy, all communities must have access to the necessary tools and infrastructure, including computing power, energy sources, and language models.

Economic toll

If we can prevent AI from becoming a new economic divide and instead make it a source of generational wealth, we could potentially close many gaps and generate prosperity for all. This could cost the U.S. economy between $1 trillion to $1.5 trillion between 2019 and 2028 if we don't take steps to prevent racial biases from being reinforced by these tools.

The development of AI is expected to create three distinct waves of opportunity, each of which will capture value in a different way. The first wave is already benefiting hardware vendors, while the second wave will go to super scalers like , , and other large companies that can offer broad connectivity to compute. The third wave will benefit enterprise software vendors who provide AI and GenAI solution sets on top of their existing products. To maximize the long-term growth of AI and GenAI, we must focus our equity efforts on these three distinct verticals.

We have the opportunity to anticipate the advancements in AI and take proactive measures to ensure that everyone can benefit from its capabilities. As companies continue to innovate and scale their products, we must prioritize accessibility to AI technology. If we fail to do so, we will not be able to fully realize its potential. As we navigate these critical junctures, we must adopt a comprehensive and decisive approach to establish the necessary infrastructure for AI and GenAI empowerment.

Robert F. Smith is the founder, chairman, and CEO of Vista Equity Partners. He serves as chairman of Student Freedom Initiative (SFI) and Carnegie Hall, founding director and president of the Fund II Foundation, and co-lead of Southern Communities Initiative (SCI). In 2019, Smith eliminated the student debt of approximately 400 Morehouse College graduates and was named one of TIME 100's Most Influential People in 2020.