The global rush to build artificial-intelligence infrastructure has become one of the forces the Reserve Bank of Australia is watching most closely as it weighs the Inflation outlook. In an interview on the ABC's 7.30 programme on 8 September 2026, Deputy Governor Andrew Hauser listed an "unexpected AI-driven global boom" as one of three risks that could push inflation higher rather than lower.

It is important to be precise about what the Bank is saying. This is a potential inflation risk under active monitoring, not a confirmed problem. The AI Investment wave could add to Demand for labour, materials and energy faster than the economy can Supply them, but its full effect on prices is still uncertain, and some of it may leak offshore.

With the cash rate at 4.35 per cent and inflation above target, the Bank is treating the boom as a demand-side risk worth taking seriously.

What the RBA Said

Mr Hauser grouped the AI boom with the Middle East crisis and Australia's weakened supply potential as the three things that "might mean inflation is going up, not down". He acknowledged recent inflation had been "a little stronger than we'd expected" and growth "a bit stronger", the kind of surprises that can accompany an investment surge.

Assistant Governor (Economic) Sarah Hunter added detail at the AFR Property Summit the same day. She noted that Business investment had shown "double digit growth" over the past nine to twelve months, with "a decent chunk" of that going into data centres.

Crucially, Ms Hunter also explained why the inflation impact might be smaller than the headline investment figures suggest. Much of the equipment, she said, such as racks, servers and wiring, is imported, so builders "build the shed locally" but bring the high-value contents from overseas. That Import leakage offsets some of the domestically-driven activity that would otherwise add to price pressure.

The Key Numbers

Business investment: double-digit growth over 9–12 months, with "a decent chunk" in data centres. Headline CPI: 3.5%; trimmed mean: 3.6%. September hike odds: ~67%.

What Could Happen Next

The path from here depends on how much of the investment boom translates into domestic demand for scarce resources, and how quickly supply can adjust. That is analysis rather than forecast, but it follows directly from the Bank's own framing.

If the labour-poaching effect Ms Hunter described intensifies and spreads beyond Sydney and Melbourne, it could add to construction costs at a time when housing inflation is already running at 5.0 per cent. If, on the other hand, the import leakage dominates, the domestic inflation impact may stay modest.

The Bank has left itself room to respond either way. Ms Hunter said the Board may have to raise rates if inflation looks stronger than forecast, and described inflation as "top priority right now". The AI boom will be one input among many at the September meeting.

Conclusion

The Reserve Bank has flagged the AI and data-centre investment boom as a genuine but still-uncertain inflation risk. The mechanism is plausible, with double-digit investment growth and early signs of labour being drawn from other construction, yet the Bank is careful to note the offsetting import leakage and to stress it is too early to size the effect. For now, it is a risk under watch rather than a confirmed problem, and one the Board will weigh alongside oil and domestic supply as it decides its next move.