Inflation Is a Tax on AI’s Unfettered Spending Spree: Conor Sen

There is a growing risk of economic overheating in the US as the artificial intelligence boom expands beyond semiconductors and spills into the broader economy — never mind the tame wage growth and house prices that would typically point in the opposite direction. If AI spending continues apace, accompanied by a rising stock market, there’s likely no way to avoid a widening pickup in inflation.

This marks a shift from last year when AI optimism was roughly offset by weakness in other parts of the economy, leading to a K-shaped dynamic that Americans have generally disliked.

More than $700 billion in ...