AI is no longer just a productivity story, it is fast becoming a demand story with real consequences for inflation, according to new analysis from LSEG Data & Analytics.
US price pressures remain stubbornly above the Federal Reserve’s target. LSEG Data & Analytics highlights that CPI climbed 3.8% year-on-year in April, up from 3.3% in March, while core inflation edged up to 2.8% from 2.6%. Energy and shelter costs drove much of the increase, and producer prices rose at an annual rate of 6%, the fastest pace since late 2022.
Markets have taken notice. Treasury yields have pushed higher and long-dated TIPS yields have hit their highest levels in over a year. Attention has also turned to newly appointed Federal Reserve chair Kevin Warsh, who has backed price stability when inflation risks are elevated, while suggesting AI-driven supply-side improvements could moderate inflation over time.
The LSEG Data & Analytics research points to AI investment as an increasingly significant demand driver. Prices for computer software and accessories have risen nearly 14% over 12 months, while wholesale electronic component prices jumped 28%. Trade data tells a similar story, with computer imports more than doubling in Q1 2026 year-on-year, semiconductor imports up 40% and computer accessory imports up 37%.
Energy is another pressure point. After a decade of modest growth, US electricity production rose 2.5% in 2024 and 2.4% in 2025, with data centres widely viewed as a contributing factor. Consumer electricity prices climbed 4.6% year-on-year in March.
The scale of spending is striking. Leading AI firms including Google, OpenAI, Anthropic, Meta, Amazon and Oracle collectively committed an estimated $300bn to capital expenditure in 2025. The five largest US hyperscalers, Microsoft, Alphabet, Meta, Oracle and Amazon, are projecting combined capex of roughly $720bn in 2026. Revenues are following, with Microsoft reporting an annualised AI revenue run rate above $37bn, up more than 120% year-on-year, while Anthropic is expected to reach its first quarter of operating profitability.
Yet LSEG Data & Analytics notes that questions persist over whether this spending will generate sufficient long-term returns, with some analysts estimating hundreds of billions in recurring annual revenue may be needed to justify it. Over the longer term, many economists still view AI as disinflationary, as automation and efficiency gains lift productivity. In the near term, however, capex at scale is likely to keep supporting demand and pricing dynamics, leaving policymakers to weigh traditional inflation indicators against new structural forces.
For more, read the full report here.
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