Jefferies warns AI spending spree could keep US inflation high

Artificial intelligence has become one of the biggest drivers of economic growth in the United States. Technology companies are spending billions of dollars on data centres, advanced chips and computing infrastructure to build and expand AI capabilities. However, this investment boom is also creating new challenges for the world’s largest economy.

The rapid rise in AI-related spending could keep inflation higher than expected in the United States and force interest rates to remain high for a longer period, reported ANI citing Jefferies’ latest Greed & Fear report. The report stated that the huge amount of money flowing into AI infrastructure is boosting economic activity but is also adding to price pressures across the economy.