AI & Economy News — 2026-10-07 (Wed) Morning News

Overview

San Francisco Federal Reserve President Daly has warned that AI demand could prolong the energy shock and that the tight supply of AI semiconductors could keep prices high (Axios, IndexBox). Meanwhile, Microsoft published a conservative AI forecast by Nobel economists that predicted GDP growth of just 1.5% over 10 years (The Decoder). The focus of the past 12 hours is that while AI is pushing up prices, energy, and capital investment, it is not reflected in productivity statistics.

Macroeconomic/growth trends

Daly said further tightening would depend on whether the AI, tariff and energy shocks persist (investingLive). It also warned that the tight supply of semiconductors for AI could cause prices to remain high (IndexBox). Some companies are bracing for a squeeze in semiconductors that could push up prices beyond just data center demand (Newsquawk). The forecast of 1.5% GDP growth over 10 years published by Microsoft shows a cautious view of the growth boosting effect of AI (The Decoder). Paul Krugman also discussed it under the title "AI Versus Everything Else" (Paul Krugman | Substack). For Europe, the issue is what the AI capital investment cycle means for growth (TradingView).

Productivity trends

It has been pointed out that "AI is everywhere, but it is not included in productivity statistics" (Yahoo Finance). It appears that the gap between micro results and macro statistics continues. Brookings argued that changes in the labor market under generative AI are in their early stages, quiet on the surface but swift undercurrents (Brookings). In Japan, it was reported that even a single marketer was eight times more productive (Nikkei Cross Trend). There was also an argument that ``AI's true impact will be manifested in deflation, and as productivity increases, profit margins will decline'' (DIAMOND Harvard Business Review). Kensuke Ozawa, a member of the Ministry of Economy, Trade and Industry, asked what compensation should be in the age of AI, asking whether if productivity were to double, wages would be doubled or workers would get three days off per week (Minkabu). Australia highlighted the untold costs behind hopes that AI will save money (Politico).

Trends in employment and labor market

HubSpot will cut jobs affecting 660 employees as it transitions to AI (CBS News). The report found that AI could force 11 million Americans to switch to new jobs by 2035 (Scripps News). One commentator (SmartBrief) argues that ``stronger personnel standards of evidence are needed for layoffs based on AI.'' Reports on preparing for the workplace in the age of AI continued (WCTV, WLBT). There is also a commentary that says, ``AI will not destroy prosperity, but fear will.'' (GIS Reports)

Trends in energy/power demand

The World Bank has pointed out that AI data centers could consume 4% of the world's electricity by 2035 (Jakarta Globe). Data centers drive investment in natural gas and solar, while straining the power grid (The Star Democrat). Congress is working to address the impact data centers will have on electricity prices (Yahoo Finance). ABB has announced a new range of direct current products that will revolutionize the energy infrastructure of AI data centers (ABB).

Remarks by central banks, international organizations, and VIPs

- San Francisco Fed President Daly: He said that further tightening would depend on whether the AI, tariff, and energy shocks persist, and expressed concern that prices would remain high due to the tight supply of semiconductors for AI (Axios, investingLive, Forex Factory, IndexBox). - ECB's Lane: pointed to the AI investment boom as a global factor behind the rise in yields (Yahoo Finance). - World Bank's Ohnsorge: says India's biggest long-term risk is falling behind in AI (Forbes India). The World Bank also pointed out that India's next growth phase will be determined by access to jobs, skills, and AI (The Federal). - World Bank: Global demand for AI hardware is reportedly supporting East Asia's growth, which exceeds the bank's forecasts (PYMNTS.com). - Daron Acemoglu (MIT economist and Nobel Prize winner) said that AI will replace only about 5% of human jobs in 10 years (Dealroom). - Christine Lagarde, Kazuo Ueda, Andrew Bailey, Kristalina Georgieva, Mathias Cormann, Ajay Banga and Erik Brynjolfsson's statements do not appear in the headlines.

Trends in corporate capital investment

Major cloud providers (hyperscalers) are investing more money in the AI infrastructure race than their cash flow, with capital investment expected to exceed $1 trillion (NDTV Profit). This situation, called "reverse crowding out," indicates a change in the funding structure for AI infrastructure investment (NDTV Profit). The spillover to European growth is also being discussed (TradingView).

Trade and industrial policy

US senators held a press conference calling for stricter controls on AI exports to China (The Lufkin Daily News). Daly expressed concern about the lingering impact of tariffs, AI demand, and energy costs on prices (Forex Factory). There are no headlines regarding industrial policy such as subsidies in this material.

Integrated analysis: What is happening now

The overall framework seems to be the time lag in which capital investment is advanced and productivity results cannot catch up. Capital investment is expected to exceed $1 trillion (NDTV Profit). The World Bank reported that growth in East Asia will exceed expectations (PYMNTS.com). On the other hand, AI is not reflected in productivity statistics (Yahoo Finance), and Microsoft's forecast is only 1.5% growth over 10 years (The Decoder). The ripple effect of investment extends to prices and electricity. Daly's warning, which cites the semiconductor squeeze and energy as factors pushing up prices, echoes the World Bank's electricity outlook and grid loads (IndexBox, Jakarta Globe, The Star Democrat). AI on the demand side has the potential to create inflationary pressure through supply constraints, and is becoming a factor in monetary policy decisions (investingLive). In the labor market, Acemoglu's replacement size of about 5% is expected, along with HubSpot's cuts and 11 million jobs expected (Dealroom, CBS News, Scripps News). This seems to indicate that even if the impact is small on a macro level, it will be large on individual companies and occupations. Japanese essays point out the possibility that improved productivity will lead to lower prices and lower profit margins, and also raise the issue of distribution of results (DIAMOND, Harvard Business Review, Minkabu). This point intersects with the debate over whether AI is an inflationary or deflationary factor.

Future points of interest

Whether the AI, tariff, and energy shocks will continue, and the impact of the tightening of semiconductors on prices. How will Daly's remarks lead to discussions about additional tightening? 2. As capital investment exceeds $1 trillion, there is a discrepancy between the way AI effects appear in productivity statistics and the cautious view of 1.5% growth forecast and approximately 5% replacement. 3. The U.S. Congress's response to electricity demand for data centers, the impact on electricity rates and the power grid, and the future of discussions on AI export controls.