Source: Fortune
Summary
Goldman Sachs, J.P. Morgan Asset Management, and Stifel have found that the AI buildout is currently inflationary, with AI-related price pressures adding to annual core PCE inflation and core CPI. The findings point to three channels through which the AI boom is putting upward pressure on inflation: the hardware squeeze, software subscriptions getting pricier, and increased electricity costs. Despite promises of a productivity payoff, some economists and Gen Z workers are skeptical, with many expressing frustration and distrust towards AI.
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The numbers tell one story.
Goldman Sachs estimates AI-related price pressures have added 0.3 percentage points to annual core PCE inflation and 0.1 percentage points to core CPI. J.P. Morgan Asset Management’s David Kelly notes that memory chip prices have soared due to AI buildout demands, raising costs for manufacturers. Meanwhile, Gen Z workers are growing increasingly hostile to AI, with 44% admitting to actively sabotaging their company’s AI rollout. The AI era has an inflation problem, a credibility problem, and a growing constituency that isn’t willing to wait around to find out if it all works out. The inflationary pain will eventually give way to a productivity payoff, but for now, it’s just making things more expensive.
Author: Evan Null
