Federal Reserve Governor Michael Barr cautioned that the rapid spread of artificial intelligence risks deepening income inequality in the short term, urging policymakers to prepare for potentially severe labor market shocks. Speaking at Yale University, Barr emphasized that the extent and duration of AI's economic impact will hinge on regulatory safeguards established now. Barr warned that if a small number of AI companies dominate the market, excessive concentration could widen the wealth gap as executives and shareholders see gains while smaller firms lose ground. "The vast majority of businesses and their workers will struggle to gain sufficient access to ever-improving AI resources, and will therefore reap fewer benefits," Barr said. "Overall, the labor share of income will decline, market concentration will rise, and inequality will worsen." The remarks did not address monetary policy or Barr's broader economic outlook.