Michele Bullock, Governor of the Reserve Bank of Australia (RBA), has raised concerns that artificial intelligence (AI) could represent a bubble and is not yet making the economy more efficient. She noted that rapid adoption and investment in data centres are currently adding to inflation.
Speaking at a CEDA event in Sydney, Bullock highlighted that while central banks view AI as a potential solution for productivity, there is little evidence of this effect so far. She cited research indicating that employees using AI might produce the same output but work fewer hours.
Bullock also commented on the Australian housing market, stating that house prices have declined by 3.1% over the last three months. This follows three interest rate increases by the RBA and reforms to property investor tax breaks.
The RBA Governor mentioned that a significant slump in tech values could negatively impact economic activity, a risk that all central banks are reportedly monitoring.