Your Next Power Bill Might Be Paying for AI — And America's Central Bank Just Said So

You already know AI uses a lot of electricity. Every question you ask a chatbot, every photo it generates, every video it edits — somewhere, a giant data center full of humming servers is doing that work, and those servers are thirsty for power.

This week, that energy appetite caught the attention of someone who doesn't usually talk about tech: a top official at the U.S. Federal Reserve — America's central bank — warned that AI's hunger for power and chips could keep prices high for everyone, from data centers to your household budget.

Key Takeaways

• San Francisco Fed president Mary Daly said on October 6, 2026 that the central bank is watching AI as a potential driver of inflation.
• Fed officials Michael Barr and Lisa Cook echoed the worry: AI investment is lifting chip and equipment prices, while data centers compete with the wider economy for workers and energy.
• Industry estimates suggest data centers could use four times more electricity by 2035 than they do today.
• The Fed's next policy meeting is October 27–28 — expect this debate to continue.

Image: AI-generated photorealistic illustration (INORYVA)

What happened

On October 6, 2026, Mary Daly, president of the San Francisco Federal Reserve, said in an interview with Axios that the central bank is watching artificial intelligence as a potential driver of inflation. Whether interest rates need to rise further, she explained, depends on whether today's economic "shocks" fade or keep piling up — and she named three: tariffs, oil prices linked to the Middle East conflict, and artificial intelligence.

Her point was simple: AI-related demand for chips is rising, and that could feed inflation — making price pressures last longer than expected.

Image: AI-generated photorealistic illustration (INORYVA)

She isn't the only one saying it

Daly isn't alone in this thinking. Federal Reserve official Michael Barr said last month that AI investment is driving up the price of chips and equipment — with those increases spreading to other products and services. Fellow official Lisa Cook warned that new data centers are competing with the rest of the economy for construction workers and energy, and that AI's hoped-for productivity gains probably won't arrive fast enough to offset rising prices.

The numbers behind the worry

The numbers are striking. Industry estimates suggest data centers could use four times more electricity by 2035 than they do today. Construction is exploding to match: LG Electronics recently signed a long-term deal to supply cooling equipment for more than 5 gigawatts of AI data center capacity in North America, and one Kentucky campus alone just doubled its contracted power to a full gigawatt.

Why it matters

Image: AI-generated photorealistic illustration (INORYVA)

This is one of the first times central bankers have treated the AI boom as something that could shape interest rates — the same rates that determine mortgage costs, loan prices, and how expensive everything feels. When a giant data center opens near a city, it doesn't just use power for itself; it competes for the same electricity, workers, and equipment everyone else needs. That competition can nudge prices upward.

It also flips the usual AI story on its head. Most coverage focuses on what AI can do — write your emails, design your logo, even run a small business. Now the conversation includes what AI costs, measured in real dollars on real bills. The Fed's next policy meeting is October 27–28, so expect this debate to continue.

The takeaway

The AI revolution doesn't run on magic — it runs on power plants, power lines, and semiconductors. The same technology that makes chatbots smarter may also make the world a little more expensive in the short term. Daly still believes AI could pay off hugely in the long run by boosting productivity. But for now, even America's central bank is counting the cost of keeping the machines running.