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AI Promised Lower Costs, Then Tech Prices Exploded

The Australian

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Description

The technology promising to make Australians wealthier is making phones and computers more expensive, and helping drive interest rates to a 15-year high.

Summary

The Reserve Bank of Australia has issued warnings that the global boom in frontier AI development is paradoxically driving up inflation by increasing the costs of essential hardware like smartphones and PCs. This trend challenges early economic projections that AI would lead to immediate cost reductions through automation and efficiency. The report highlights how the intense competition for high-end semiconductors and computational resources, necessary for advancing AI capabilities, creates supply chain pressures with broader macroeconomic implications. While not directly analyzing catastrophic risks, it underscores the resource-intensive nature of the current AI race and its impact on the Australian economic landscape and interest rate environment.

Body

AI promised lower costs, then tech prices explodedThe technology promising to make Australians wealthier is making phones and computers more expensive, and helping drive interest rates to a 15-year high. All your news for a great price Unlock this story and more with your subscription Digital Access What’s included Unlimited access on app & web A digital version of Today’s Paper Daily puzzles & Mind Games A subscription to The Wall Street Journal Subscriber-exclusive newsletters & early access to tomorrow’s front pages Pay As You Go No lock-in contract $1 a week for 4 weeks($4 min. cost). Then $44 charged every 4 weeks.* *Read the fine print The Australian Digital subscription costs $4 charged for a duration of 4 weeks, after which it automatically renews to $44 charged every 4 weeks. Renewals occur unless cancelled as per full Terms and Conditions. Each payment, once made, is non-refundable, subject to law. Not in conjunction with any other offer. New customers only. Prices after any early discounted periods may be varied as per full Terms and Conditions. See www.theaustralian.com.au/subscriptionterms for full details. 12 Month Plan Lock in & save $6.50 a week for the first 12 months($338 min. cost) charged as $26 every 4 weeks. Then $26 charged every 4 weeks.* *Read the fine print The Australian Digital subscription 12 Month Plan costs $338 (min. cost) for the first 12 months, charged as $26 every 4 weeks. This automatically renews after the first 12 months to be charged as $26 (min. cost) every 4 weeks. Renewals occur unless cancelled as per full Terms and Conditions. No cancellations during the first 12 months. Each payment, once made, is non-refundable, subject to law. Not in conjunction with any other offer. New customers only. Prices after the first 12 months may be varied as per full Terms and Conditions. See www.theaustralian.com.au/subscriptionterms for full details. Subscribe Other subscription options Print + Digital Subscriptions Corporate Subscriptions Student Subscription Verified journalism. Expert analysis. Study smarter and stay informed with a student subscription View offer View offer Your Selection: $0 Your Selection – Change selection Today’s Total $0 Read the fine print Terms and Conditions Sorry, we are unable to process your request at this time. Please try again later.