(Revised July 2026)

What is the effect of artificial intelligence (AI) on employment and wages? Using administrative data on a comprehensive set of AI applications developed in Brazil, I show that AI is widely used not only in administrative tasks but also in the production setting, where it primarily supports process optimization and quality control. Exploiting exogenous variation in AI development costs, I find that AI affects administrative and production workers differently. In office occupations, AI reduces employment, especially among young workers performing data-processing tasks. In production occupations, it increases employment of young and low-skilled workers by helping them perform decision-making tasks that previously required expertise. On net, AI increases employment in Brazil because gains in production outweigh losses in office work.