The Federal Reserve’s top official just admitted that artificial intelligence caught everyone off guard, including the people who were already bullish on it.
Fed Chair Kevin Warsh used his keynote at the Jackson Hole Economic Policy Symposium on August 28 to deliver a message that landed somewhere between awe and alarm: AI progress has outrun even the most optimistic forecasts from prior years. He described the current moment as a “hinge point in history,” a phrase that carries considerably more weight when it comes from the person steering US monetary policy.
The numbers behind the warning
Business capital expenditure growth hit roughly 9% over the trailing four quarters. More than half of that spending went directly into AI infrastructure, meaning data centers, chips, and the computing backbone that powers large language models.
Token sales for leading AI labs reportedly topped $100B, a 500% increase from the prior year.
