Nagy said the rapid pace at which AI was advancing would have an impact on the everyday operation of businesses. He added that AI could boost productivity by 26% and lift GDP by 15%, while contributing to the creation of 1 million high-value-added jobs.

Outlining the future impact of AI on the Hungarian economy, Nagy told the conference that the IMF had estimated that 40% of workplaces globally would be transformed by the developing technology, while other research suggested AI could add USD 15.7 trillion to the global economy, lifting GDP by 26%.

Broad adoption of AI could also give a boost to labor productivity, he added. AI could change the way production chains work, boosting productivity in the food sector through data generated by the Internet of Things, and allowing more effective inventory management in the retail sector, he said.

In the financial sector, using AI could increase security, reduce costs, improve customer experience and automatically flag suspicious transactions, he added. He acknowledged the risk AI presented to the labor market, mainly to office jobs and positions requiring a high level of qualification, adding that one European survey suggested AI would put 24% of jobs at risk due to automatization. Those risks need to be managed in time, he said.

Europe is lagging behind in the area of AI, in terms of R&D and hardware, while China is catching up to the United States, he said. China is the leader in the areas of optical communication, machine learning and data analysis, he added, noting the risk of monopolies developing in some technological areas. He raised the possibility of AI becoming a central element of the conflict between the United States and China.

Nagy said his ministry was in charge of representing Hungary on the European AI Board, established to smooth the implementation of the EU’s AI Act. The new act in the context of boosting EU competitiveness is a focus of Hungary’s presidency of the Council of the EU, he added.

While big companies in Hungary are only a little behind the EU average in terms of corporate digitalization, local SMEs have catching up to do and need to be encouraged to use AI, he said. He pointed to a number of local success stories driven by the adoption of AI, such as hauler Waberer’s use in warehousing, Hell Energy’s use in soft drink production, and applications at the ZalaZone vehicle test track.