Daly Says AI Demand May Ease as Chip Price Concerns Persist

Federal Reserve Bank of San Francisco President Mary C. Daly said artificial intelligence demand could soften without collapsing and raised concern that chip-related price pressures may persist longer than she previously expected.

In a Friday, Nov. 6, interview, Daly said demand “might come down a little.” She described the recent repricing of AI demand as painful but orderly.

On Oct. 6, Daly described recent technology price pressure as a temporary shock. The November comments update her demand outlook while revisiting the pricing concern.

Daly has said AI could put downward pressure on prices over five to 10 years, but she does not expect that possibility to shape monetary policy now. She remains cautious about when productivity gains may arrive and how large they could be. The longer-term question is part of Daly’s analysis of AI in Fed policy.