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Abstract
The emergence of Artificial Intelligence has come with it this transformative force that has moved across various sectors; hence there is a kind of reorganization of societies and economics worldwide. This study examines the impact of Artificial Intelligence (AI) and Machine Learning (ML), on economic development especially in the area of labor market transformation. The study shows that AI has made a lot of impact on productivity, innovation and economic growth generally. The findings bring to light both opportunities and limitations of AI in economic context. However, this review provides a broad understanding of the importance of AI on economic development. AI is the name given to the broad spectrum of technologies by which machines can perceive, interpret, learn and act by coping human intellectual capabilities. Keywords: Artificial intelligence, labor market, economic development, productivity, innovation.