# Federal Reserve Highlights AI Inflation Risks

Federal Reserve Board of Governors Member Lisa Cook emphasized that the surge in demand for artificial intelligence (AI) technologies is driving sector-specific inflationary pressures, particularly affecting AI-related goods such as chips, computers, and software. While supply chains are expected to adapt without direct policy intervention, broader inflationary effects may arise due to increased demand for critical inputs like energy and construction labor, which are widely used across multiple economic sectors. This dynamic signals potential price volatility and cost increases that procurement professionals and contractors in AI, technology, and infrastructure sectors should consider in their planning and contract negotiations.

- **Why this matters:** Increased AI investment could raise costs for energy and labor inputs, impacting budgets and contract pricing across government technology and infrastructure projects
- Procurement teams should evaluate potential inflation-driven cost escalations in AI-related procurements and related supply chains
- Contractors and suppliers in AI hardware, software, and data center construction may face higher input costs, affecting delivery timelines and pricing
- Organizations can benefit from incorporating inflation risk assessments and flexible contract terms to mitigate price pressures associated with AI-driven demand growth

**Jurisdictions:** federal
**Industries:** Information Technology
**Topics:** Artificial Intelligence, Regulatory Compliance
**Published:** September 28, 2026

### Government Entities
- Federal Reserve Board of Governors (Fed)
- Federal Open Market Committee (FOMC)
- Bureau of Economic Analysis (BEA)

### Key Quotes
> Data center investment relies on inputs, like construction labor and energy, that are broadly used in many sectors in the economy. As a result, increased AI investment could introduce price pressure to those other sectors.
> — Lisa Cook, Federal Reserve Board of Governors Member

### Sources
- [Lisa Cook says AI surge risks wider inflation through energy and labor](https://thehill.com/business/6115963-cook-warns-ai-price-pressures) - The Hill