For the better part of two years, a powerful consensus has taken hold: Artificial intelligence is the great disinflationary force of our time. The logic, touted by billionaire investors like Marc Andreessen and Vinod Khosla, is seductive and seemingly airtight. AI substitutes cheap technology for expensive human labor. It supercharges productivity. It lowers barriers to entry, spawning legions of scrappy startups that compete on price and margins. The result, the thinking goes, is a secular decline in inflation that will keep interest rates low for years and give the Federal Reserve room to breathe.
There’s just one problem. When Deutsche Bank’s economists decided to test that consensus—by asking the AI tools themselves—the machines disagreed.
