Federal Reserve Says AI Data Center Buildout Is Making Everything More Expensive

It’s not just your electricity bill that could be going up — it sounds like the massive boom in AI data centers is making practically everything more expensive.

As the Washington Post reports, officials at the Federal Reserve are starting to sing a different tune after blaming president Donald Trump’s tariff war on rising prices, admitting that the explosion in “AI-related investments” is contributing to inflationary pressures. That’s on top of Trump’s Iran war already sending the price of oil soaring.

Federal Reserve Bank of Chicago president Austan Goolsbee told Semafor that AI-tied inflation is “jumping out of its lane.”

“Prices are going up in spaces that are not just components in data centers and the directly adjacent industries,” he said. “I’m getting increasingly nervous that that’s just straight, old-fashioned overheating demand.”

In economics, overheating occurs when aggregate demand outpaces productive capacity, leading to demand-side inflation, higher prices, and eventually reduced demand and consumption. In the worst case scenario, overheating can even trigger a recession.

“It takes a long time for overheated demand to get going, and once it’s going, it’s hard to get rid of that,” Goolsbee added. ...
Rest of article: https://futurism.com/artificial-intelligence/federal-reserve-ai-data-center-buildout-more-expensive
#AI #expensive