Goolsbee Warns AI Data Center Boom May Overheat US Economy

Austan Goolsbee, President and CEO of the Federal Reserve Bank of Chicago, sounded a cautionary note about the rapid expansion of AI data centers. According to him, this boom could lead to overheating in the US economy.

Goolsbee noted that while the real side of the economy has been stable, it's now at risk of overheat. On the inflation side, he said that after strong progress for a couple of years, the trend stalled and worsened.

The AI hype is particularly concerning because it's putting pressure on other parts of the economy, such as construction workers, heating and cooling equipment, and resources needed to build infrastructure. Goolsbee described data-center expansion as 'very hot', warning that he's nervous about potential economic overheating if its impact spreads further through the economy.

Goolsbee emphasized that consumer spending has been a key factor in keeping the economy stable and growing. He believes policymakers should focus on this rather than AI's long-term impact.