Fed’s Kashkari says big companies are slowing hiring

Minneapolis Federal Reserve President Neel Kashkari said Monday that artificial intelligence is causing big companies to slow hiring, and that many businesses are seeing “real productivity gains” because of the technology.

Kashkari said companies have told him that AI is affecting their hiring plans, and he expects to see continued low hiring and low firing in the labor market. This is less true for smaller companies, however, he said.

“AI is really a big company story,” Kashkari told CNBC’s “Squawk Box” on Monday.

Since OpenAI kickstarted the AI boom with the launch of ChatGPT in 2022, companies across the U.S. have been spending billions of dollars to try and bring the technology to their employees. But as investors and executives chase promises of greater efficiency and productivity, AI’s rapid rise has also sparked concerns about safety and job security.

Even so, Kashkari said businesses are beginning to see some returns on their investments.

“There’s no question that there’s some mis-investment or mal-investment that’s going on, but there are too many anecdotes of businesses using this and actually seeing real productivity gains,” Kashkari said. “Businesses that I talked to that two years ago were skeptical are saying, ‘No, we’re actually using it now.'”

WATCH: Watch CNBC’s full interview with Minneapolis Fed President Neel Kashkari