CNBC: AI's expensive build-out and slow corporate adoption are causing short-term inflationary pressures, rather than the previously predicted deflation, complicating the Federal Reserve's anti-inflation efforts.

Tech leaders like Elon Musk and OpenAI CEO Sam Altman have predicted that AI will bring about deflationary effects. However, the current rollout of AI in the economy is encountering corporate inertia, leading to short-term inflation and a lack of evidence for sustained productivity booms. The tech industry's multi-trillion-dollar spending on data centers and AI infrastructure has disrupted supply chains and driven up costs in sectors like electricity. Goldman Sachs research estimates that US AI construction capital expenditure will reach $581 billion this year, with global figures potentially hitting $1 trillion. The Federal Reserve is divided on this issue; former Governor Kevin Warsh believes AI will be a significant deflationary force, while the Federal Reserve officials' vote in July to keep interest rates unchanged at 3.5%-3.75% was not unanimous, with some officials expressing concerns.