How AI Could Ease America’s Cost‑of‑Living Crisis — If Policy Lets It

Forty percent of voters name the cost of living as their top concern ahead of the midterms. When bills arrive — child care, medical care, gas, groceries and rent — more than half of American families say they are economically insecure. Many households are taking on extra work, delaying treatments, or borrowing from friends just to get by. The affordability crisis has become a central political issue, with both parties looking for answers.

One area where bipartisan progress is possible is technology. Artificial intelligence, automation and robotics have the potential to reduce costs across major sectors of the economy — particularly health care and transportation — if policymakers allow responsible innovation to proceed.

AI and Health Care: Early Detection and More Efficient Care

A plurality of Americans with health issues (44 percent) report they cannot afford proper care. That gap harms individuals and communities and drives downstream costs for families and employers. AI-powered digital health tools and diagnostic systems can help by detecting early signs of worsening chronic conditions, enabling timely interventions that prevent costly emergency-room visits (which average about $3,000).

These tools are not flawless, nor should perfection be the bar — about 100 million Americans lack a primary care physician, leaving a care gap that verified, affordable AI-enabled services can help fill. AI also helps clinicians spot disease earlier (from kidney disease to Alzheimer’s), reducing the need for invasive and expensive treatments. Hospitals that have integrated Diligent Robotics’ tools report operational improvements in some cases approaching 40 percent.

Transportation: Less Congestion, Fewer Crashes, Lower Costs

AI can also reduce household expenses in transportation. Systems that analyze traffic-camera footage and detect hazards — like Nota AI in Dubai — can dispatch help faster and prevent fuel-wasting congestion. Given that the average American spends more than $2,000 a year on gasoline, reducing gridlock and crash-related idling can have meaningful financial benefits.

Autonomous-vehicle technology shows promising safety gains. In Waymo’s operational areas, autonomous vehicles have produced substantially fewer crashes that injure pedestrians (92 percent fewer) and cyclists (82 percent fewer) compared with human drivers in the same cities. Wider adoption of such safety gains could chip away at a grim toll: about 40,000 people died in motor-vehicle crashes in 2023, and traffic incidents cost the economy hundreds of billions annually (roughly $340 billion in 2019).

Electricity, Grid Efficiency, and Misplaced Fears

Critics worry that expanding AI will raise electricity demand and therefore costs. While AI contributes to energy demand, electricity prices have been rising since 2020 for multiple reasons, and some costly waste stems from inefficient grid management — a problem AI can help address. Policymakers should weigh trade-offs and design policies that incentivize clean, efficient deployment rather than reflexive restrictions.

Policy Choices Will Determine Who Benefits

Legislation and regulation matter. Federal proposals such as Sen. Josh Hawley’s suggested ban on autonomous vehicles and Sen. Edward Markey’s push for strict human-in-the-loop medical requirements reflect safety concerns but risk relying on outdated assumptions about how technology develops and is used. At the state level, recent AI bills in California, Colorado and Illinois contain provisions and ambiguities that could delay enforcement or limit productive use cases.

Excessive red tape, onerous market-entry barriers, and poorly targeted bans will slow Americans’ access to potentially life-saving and cost-saving tools — tools that may be developed and deployed elsewhere if the U.S. environment becomes too restrictive.

Bottom Line

AI is not a silver bullet for affordability, and addressing the cost-of-living crisis will require multiple policy responses. Still, AI and autonomous systems can exert downward pressure on prices, expand choices, and improve safety — but only if policymakers enable responsible innovation while managing risks. Thoughtful policy should focus on verification, accountability and equitable access so technological benefits reach the households that need them most.

Kevin Frazier is the AI Innovation and Law Fellow at the University of Texas School of Law. Adam Thierer is a Senior Fellow for Technology and Innovation at the R Street Institute.