AI Race Could Backfire: Economist Warns of Inflation Risk

Rapid adoption of artificial intelligence (AI) may drive up prices if data-center construction cannot keep pace with demand for computing power, according to Alicia Garcia Herrero, chief Asia-Pacific economist at Natixis. Speaking to Bloomberg TV, Herrero said that a slow buildout of AI infrastructure — the physical facilities and systems needed to run AI — could create inflationary pressure. In other words, if demand for AI computing outpaces the supply of data centers, costs could rise across the economy. Herero's warning suggests that the speed of AI adoption must be matched by investment in the infrastructure that supports it.