IMF's Silvana Tenreyro warns AI investment may raise inflation
Business
AI is getting a lot of hype for making us more productive, but Silvana Tenreyro, the IMF's new chief economist, says its effect on prices isn't straightforward.
In a recent study, she points out that pouring money into AI technology, like computer chips and memory, before we see real results could actually push inflation up instead of down.
AI hardware demand strains supply chains
All that demand for AI hardware can strain supply chains and make things like phones and laptops pricier.
Plus, the impact depends on where those productivity gains happen: services might see lower inflation if they get more efficient, but in export-heavy industries, higher wages could drive up prices in other areas.