00:00How do you see it affecting just the cost of everyday goods, which is really becoming a political message, too,
00:05for 2026, the idea of affordability?
00:11Yeah, OK. So I would say that that question, the answer has a short-term and longer-term horizon.
00:21There's a how is it impacting inflation immediately, and there's the question of how is it impacting inflation in two
00:28to five years.
00:30So near-term, again, harkering back to the earning transcript work that we have done, we have discovered that firms
00:39are talking about a surge in metal-aluminum prices.
00:45And indeed, the aluminum prices surged in December and January.
00:52And second, Micron, which is the leading firm that produced memory chips, just said that they are going to stop
01:03producing any memory chips for consumer electronics
01:07because the demand from data center production, primarily Stargate, producing for Stargate, has completely crowded out their capacity.
01:17And this is why your computers and laptops and anything that uses memory chips are going to see double-digit
01:25inflation this year.
01:26So in the short term, this AI push is causing these energy demand that's stressing a lot of different sectors,
01:36and that's beginning to show up in consumer prices.
01:39Of course, electricity is also an area where AI is causing spillover effects to other consumers.
01:47However, in the longer term, if AI does become very disruptive to employment, as we forecast in a year or
01:57two,
01:58then labor costs is going to come down, and labor costs accounts for two-thirds, almost over half of the
02:05economy,
02:06and that should be, over time, putting downward pressure on all the prices.
02:12So I think in two to five years, I see AI generally being deflationary on the economy.
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