The Federal Reserve Chairman Kevin Warsh dedicated an entire section of his speech at the Jackson Hole Symposium to artificial intelligence. Instead of providing any interest rate signals in that part, he focused on the impact of AI on economic growth, corporate investment, and monetary policy judgments.
The growth rate of capital expenditure indicates AI construction.
Warsh says that the judgment of "long-term stagnation" that has been prevalent since the financial crisis is starting to fail. According to him, corporate capital expenditure has been growing at an annualized rate of about 9% for the past four quarters, which is the fastest since 2021. More than half of this growth is related to AI infrastructure construction. Rather than focusing on the scale of spending itself, he is more concerned with whether this growth continues to accelerate.
The annual sales of the leading laboratory exceed tens of billions of dollars.
Warsh indicates that the progress of AI is faster than even the most optimistic supporters expected a few years ago. He believes that higher potential growth is on the horizon.
He also provided a set of market data: the annualized token sales of two leading AI laboratories have exceeded $100 billion, representing a growth of over 500% compared to a year ago. In his statement, users purchase token to use these models, which has become an important source of revenue for the AI commercialization.
- Enterprise capital expenditure has increased by approximately 9% in the past four quarters.
- More than half of this growth is related to the construction of AI.
- Two leading laboratories have annual token sales exceeding $100 billion.
The Federal Reserve regards AI as a new variable.
Warsh says that the Federal Reserve is closely monitoring the market changes in the AI ecosystem and has regarded AI as "a new variable," which could even be a new factor of production. This stance implies that AI is no longer just a topic within the tech industry, but may affect the sustainable growth rate of the economy and what level interest rates should be at.
He raised several unresolved issues, including whether AI will continue to drive up overall societal productivity, when such changes will occur, and whether the use of token is merely a supplement to the labor force or a replacement for it. Warsh did not provide answers, only indicating that a working group within the Federal Reserve focused on “productivity and employment” is studying these issues.
Add value or continue to concentrate on a few key areas
Warsh also mentioned that the benefits brought by AI may not be evenly distributed across the industrial chain. A key question is which holders of scarce assets will receive a larger portion of the added value, such as AI laboratories, chip manufacturers, energy companies, and cloud service providers.
The article also cites NVIDIA's latest financial report as a reference in reality. NVIDIA announced record quarterly revenue of $96.2 billion and disclosed that the scale of infrastructure-related commitments for the next AI period amounts to $366 billion. This indicates that AI investments are still rapidly concentrating in a few core areas.
Additional information:The article also cites a previous report stating that approximately 95% of generative AI companies are failing, which contrasts with the trend of leading chip and cloud infrastructure companies absorbing more profits.
