AI and Inflation: Warnings of Market Overheating

Analysts are warning about the risk of inflationary pressures in 2026 due to the investment frenzy in artificial intelligence (AI). Reuters reports that the surge in data center investments, combined with government fiscal packages, could lead to market overheating.

US indices recorded significant gains in 2025, with tech giants contributing substantially. Meanwhile, easing inflation and expectations of interest rate cuts boosted bond markets.

However, fund managers are concerned about a potential acceleration of inflation and an abrupt end to the interest rate cut cycle. Trevor Greetham of Royal London Asset Management warns of the risk of tighter monetary policy.

The hyperscalers' race to build data centers is creating an inflationary shock, increasing the cost of energy and microchips. Andrew Sheets of Morgan Stanley estimates that US inflation will remain above 2% until the end of 2027.

Julius Benthin of Mercer expresses concerns about the risk of inflation resurfacing, while Deutsche Bank analysts predict investments of $4 trillion in data centers by 2030, with potential shortages of microchips and energy.

George Chen estimates that rising memory costs will squeeze investor returns in AI.