Economists are divided over whether artificial intelligence will ultimately push inflation higher or lower, Fortune reports.
Massive AI investment in data centers and infrastructure is increasing demand for finite resources, energy and skilled workers, potentially pushing prices higher in the short term. At the same time, AI-driven productivity gains could improve efficiency and reduce costs over the longer term.
Jeremy Siegel, an emeritus professor of finance at the Wharton School of the University of Pennsylvania, offers another possibility. AI agents that shop, negotiate and switch providers on behalf of consumers could help address affordability by making it easier to find lower prices and better financial products. Meta’s personal AI agent, Muse, for example, has payment capabilities that allow it to carry out certain transactions on a user’s behalf.
Siegel argues that AI agents could challenge what he calls “inertial monopolies,” where consumers remain with banks, insurers, telecommunications providers and other services because switching is too inconvenient. If AI agents begin routinely comparing prices, negotiating bills and finding cheaper alternatives, they could increase competition and potentially become a disinflationary force.
That possibility comes as U.S. inflation remains above the Federal Reserve’s 2% target and affordability remains a major concern. However, the technology is still developing. A recent Muse incident involving a Facebook Marketplace transaction reportedly resulted in a seller’s home address being shared without permission, highlighting potential risks.
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