Highlights

  • The RBA Deputy Governor described substantial data-centre construction activity in Australia.
  • He said demand connected with AI investment was contributing to price pressures in technology-related goods and services.
  • He distinguished current demand for AI infrastructure from any future productivity benefits.

Artificial intelligence featured prominently in remarks by Reserve Bank of Australia Deputy Governor Andrew Hauser in Sydney on 21 October 2026. Rather than discussing AI solely as a technological change, Hauser identified its associated investment boom as one of the forces affecting demand and prices. He pointed to data-centre construction in Australia and higher AI and technology prices as factors under consideration in the RBA's inflation assessment.

The comments were made during a question-and-answer session at an investment conference. They described the Bank's current analytical concerns and did not provide a forecast for the returns on AI projects or an estimate of their future contribution to output.

Data Centres and Business Investment

Hauser said large-scale data-centre building was generating substantial business-investment figures in Australia. In discussing the broader economy, he contrasted weaker household spending with pockets of growth arising from investment and stronger demand among overseas trading partners, especially in Asia.

He also referred to an unusually strong sequence of positive demand shocks internationally. The AI-related expansion, in his account, required construction, technology equipment and other inputs before any later increase in productive capacity could be realised. The speech did not quantify Australian data-centre expenditure or provide a sector-wide construction forecast.

Prices of AI-Related Products and Services

Technology-linked costs were another area of attention. Hauser said higher AI and technology prices were feeding into consumer prices in Australia and elsewhere. Later in the discussion, he noted that AI-related items were not a large component of the Consumer Price Index, but described some input-price movements as extremely steep.

He presented the inflation implications as part of a wider group of pressures, including expensive oil and constrained domestic supply. The remarks did not identify individual technology companies or products responsible for a specified increase in Australian CPI.

Demand Today and Productivity Later

The Deputy Governor distinguished between the demand created by construction and investment today and the possible supply effects of innovation later. He said AI might eventually increase productive capacity but that the current investment wave was primarily contributing to demand.

In a separate discussion of productivity, Hauser said technology adoption was an important part of Australia's economic adjustment. He also emphasised that businesses, as well as governments, had a role in addressing low investment and improving productivity. He did not prescribe a particular project or investment approach for companies or households.

Economic Questions Still Under Review

Hauser said the RBA was devoting time to understanding AI's economic effects, including the relationship between technological change, prices and productive capacity. He also referred to longer-term issues involving work, social expectations and the interaction between major technology businesses and governments.

The immediate monetary-policy consideration was whether AI-related demand could add to existing capacity and inflation pressures. The speech provided no separate monetary-policy decision, nor did it claim that the eventual productivity effects of AI were already reflected in Australia's current output statistics.

Key Insights

The speech treated AI as both an emerging source of technology-price pressure and an important component of Australian business investment. Hauser's distinction between near-term demand and potential longer-term supply effects was central to the discussion. The scale of the ultimate productivity impact was not quantified.