The increasing investment of American enterprises in artificial intelligence (AI) continues to drive rapid development in the technology industry, while also pushing up prices. Economists point out that consumers may have to bear the inflationary pressure brought by technology in the short term, but in the long run, as AI technology matures, it may ultimately exert downward pressure on prices.
The latest Consumer Price Index (CPI) in the United States shows a 3.4% year-on-year inflation rate in July, slightly lower than the 3.5% in June. While this aligns with economists’ expectations, it remains significantly higher than the Federal Reserve’s (Fed) long-term target of 2%.
According to data from the Bureau of Labor Statistics (BLS) in the United States, core goods prices rose by 0.2% in July compared to the previous month, with information technology-related goods experiencing a significant 1.4% increase for the month, well above the overall core goods. Prices for computer hardware rose by 3.5%, while software and peripherals increased by 0.5%.
The rapid development of AI requires a large amount of high-performance computing equipment, leading to a substantial increase in demand for semiconductors, graphics processing units (GPUs), and storage devices by enterprises. Citing analysis by Stephen Juneau, a senior economist at Bank of America, CBS News points out that the AI industry and consumer electronics are competing for the same resources such as chips, resulting in increased demand from enterprises leading to supply constraints and price hikes.
Juneau states that after the cost of purchasing consumer electronic components rises for enterprises, they will pass these costs on to consumers. The AI boom has also driven up prices for graphics processors and computer storage devices.
Eric Johnson, a professor at Columbia Business School specializing in AI and consumer behavior research, mentions that in the past, the price of milk was often used to gauge the cost of living and the burden on households, but now, the price of smartphones is gradually taking its place.
Furthermore, the price pressure brought by AI has extended to the energy market. Large data centers consume massive amounts of electricity, and with increasing AI computing demands, they are exerting greater pressure on the national grid, thereby raising electricity costs for the public. The latest CPI data shows a 4.2% increase in electricity prices in July compared to the same period last year.
Economists generally believe that large-scale investments in AI by enterprises will continue to drive inflation in the short term. Bernard Yaros, Chief US Economist at the Oxford Economics Research Institute, predicted in a recent report that the price increases brought by the tech boom will continue to exert an “unusually strong uplift” on core inflation rates over the next two years.
Yaros believes that the inflationary pressure driven by technology may last longer than other factors such as tariff increases or geopolitical factors pushing up energy costs.
(This article references data from CBS News and the Bureau of Labor Statistics in the United States)