New York is “sleepwalking into the age of AI,” the city comptroller’s office said Thursday, warning that uncertainty around the technology’s economic impact could have broad implications for jobs and the office-driven economy.
In a new report, Comptroller Mark Levine's office outlined five scenarios in what is being billed as the first study of AI’s potential impact on the city’s economy and finances. Potential effects for New York range from productivity gains with limited disruption to cases where the AI investment boom fizzles to rapid adoption leading to widespread job losses.
In total, the report assigned a 50% probability to scenarios where AI could have negative effects on jobs, economic growth or tax revenue.
'Whatever disruption lies ahead, New York City needs a stronger fiscal cushion to give our city the resources it will need to navigate the uncertain years ahead.'
“Some have called this uncertainty the 'AI fog,'” Levine said. “Whatever disruption lies ahead, New York City needs a stronger fiscal cushion to give our city the resources it will need to navigate the uncertain years ahead. … The enormous uncertainty that AI presents our local economy is no excuse to not prepare.”
The report builds on national scenarios developed by Moody’s Analytics and adapts them to reflect risks specific to New York.
The comptroller’s office recommended that the city increase its Revenue Stabilization Fund, or “rainy day fund,” to 16% of tax revenue, describing it as a needed “fiscal shock absorber.” Currently, the fund — along with money set aside to cover retiree health benefits — totals about 8.5% of projected fiscal 2026 tax revenues.
Growing concern
The findings come amid growing concern about artificial intelligence’s impact on office-using industries that underpin New York’s economy. Tech firms including Meta, Coinbase and Snap, for instance, have reported job cuts tied to AI-using efficiency gains or shifting investment toward AI, while investors have raised concerns that the technology could reduce demand for office workers and space. Office landlords such as SL Green Realty and brokerages including Newmark have pushed back against those fears.
“More than a million people go to work each day in Manhattan office towers, many in occupations now on the front lines of AI disruption,” the comptroller’s office said in the study, adding that the city’s tax base “depends heavily on a financial industry increasingly intertwined with AI.”
While the long-term impact of AI remains uncertain, the report points to “unprecedented and seemingly quirky” labor market trends already emerging both nationally and in New York. Historically, hiring and layoffs moved in opposite directions, but in the past two years, both have slowed, resulting in what the report describes as a “low-hire, low-fire” economy.
That shift may reflect AI’s early impact, particularly in knowledge-based industries, where entry-level roles have been most vulnerable to AI-driven efficiency and automation, according to the report. At the same time, employers are placing greater emphasis on soft skills and specialized knowledge. The report found that unemployment among recent college graduates has risen to 7.3% in the 12 months through March, surpassing the 7.1% rate for those without degrees — the first time that gap has reversed.
While artificial intelligence could automate much of the workplace, leading to fewer workers and less office space, it's also prompting the creation of companies that are major users of real estate.
ChatGPT maker OpenAI, Anthropic, Nvidia, Databricks and other AI companies have collectively become the largest pursuers of space across the U.S. market, helping to lower record-high levels of office availability and leading a post-pandemic recovery.
Office market resilient
Despite softer hiring trends and potential risks to white-collar jobs, Manhattan’s office market, the largest in the country, has remained resilient.
Leasing volume rose about one-third last year to nearly 31 million square feet, driven by demand for top-tier space that continued in early 2026 and was led by tenants such as Bank of America and American Express, according to the comptroller's report. AI-related companies have also played a key role in that demand and contributed to leasing activity at properties including One Madison Avenue and One World Trade Center.
Among the country's largest cities, commercial leasing generated by AI and tech companies accounted for about 20% of the total volume last year, the most of any industry, according to data from CoStar and real estate services firm CBRE.
“Artificial intelligence is not a distant possibility,” the comptroller's report said. “It is already reshaping the economy, changing how businesses operate, altering the skills workers need, influencing financial markets and creating new risks and opportunities. For New York City, the stakes are especially high.”