Key facts
- Michelle Turner, a first-time founder, utilized AI tools to develop her startup, Here Now Health.
- Here Now Health provides mental health counseling for foster children and has expanded to 16 employees and three states.
- Federal Reserve officials are examining AI's broad economic implications, including productivity, growth, and labor market changes.
- Concerns exist about AI potentially leading to higher unemployment and shifting economic returns from labor to capital.
- Experts suggest AI is reducing the cost and complexity of starting businesses, potentially creating jobs.
- A study warns that millions of workers in roles susceptible to AI replacement could face career stagnation.
Michelle Turner, a first-time founder with no MBA, leveraged artificial intelligence tools to rapidly develop her startup, Here Now Health, which provides mental health services for foster children. Working from home, she used AI to educate herself on startup culture, craft a business plan, and refine her investor pitch, securing early-stage funding.
Launched in January 2025, Here Now Health has since grown to 16 employees and is certified in three states to offer Medicaid-funded counseling, addressing a critical gap in care identified through Turner's personal experience as a foster parent. Her journey exemplifies how AI is lowering barriers to entry for entrepreneurs, enabling faster scaling and job creation.
The rapid proliferation of AI is a central focus for Federal Reserve officials, who are assessing its potential to reshape U.S. economic productivity, growth, inflation, and labor demand. Fed Chairman Kevin Warsh has highlighted AI as the most significant economic change of his lifetime, while acknowledging its disruptive nature. A dedicated panel will explore AI's implications for productivity, which could allow for faster economic growth with lower inflation but potentially require fewer workers for the same output.
Concerns are emerging about AI's impact on the labor market, with some Fed officials and analysts suggesting the possibility of structurally higher unemployment. There are also questions about whether AI will lead to a greater share of national income flowing to capital rather than labor, raising social and political implications. Investment in AI-related infrastructure, such as data centers, is also driving economic growth but contributing to increased costs for power and labor.
Experts like John Bailey, who advised Turner, note that AI is making it significantly cheaper and faster for traditional companies to deliver services, empowering entrepreneurs to scale and hire. Torsten Slok, chief economist at Apollo Global Management, links a recent rise in new business formations to AI's role in reducing the cost and complexity of launching companies. Richmond Fed President Thomas Barkin has observed that AI is helping to alleviate worker shortages in some skilled occupations, boosting supply.
However, the transition may not be without pain. Researchers warn that millions of workers, particularly in clerical and administrative roles without college degrees, are at risk of job displacement by AI. A study by the Brookings Institution and Opportunity@Work identified approximately 23 million individuals whose career paths are highly exposed to AI replacement, potentially leading them to lower-paying roles. This disruption could have significant regional impacts, particularly in areas with a high concentration of susceptible jobs.