New York Federal Reserve President John Williams said AI equipment supply could take more than two years to catch up with demand, which may contribute to inflationary pressure.
During a Tuesday interview with Bloomberg, Williams noted that the buildout of AI infrastructure is driving up chip prices and the cost of goods that rely on them. When asked whether supply and demand in the AI sector would balance within two years, he responded that he expects the shortage to persist longer, contingent on continued demand growth.
Williams reaffirmed his view that the Federal Reserve may need to raise interest rates once more this year to combat inflation. He stated he has not changed his position on a potential additional rate hike, though he expressed uncertainty about rate policy beyond 2027.
Despite higher interest rates, Williams expects AI investment to remain robust. He characterized AI investors as relatively price-insensitive, noting that they view the technology as transformative for productivity and the economy, factors that would limit the impact of monetary policy on investment decisions.
The AI equipment shortage could affect Bitcoin miners expanding into artificial intelligence, as they compete for chips and power equipment alongside other operators. Industry activity includes new compute contracts and ongoing financing efforts by miners pursuing AI projects.
