An argument in favor of the artificial intelligence boom is that it could make businesses dramatically more productive and goods and services cheaper. For the Federal Reserve, however, AI is creating a more immediate problem in that area.
The enormous cost of building the infrastructure needed to power it may be adding to inflation before those promised productivity gains arrive. Silicon Valley leaders including OpenAI CEO Sam Altman and Elon Musk have predicted that increasingly capable AI and robotics will ultimately push costs sharply lower.
