Reserve Bank of Australia (RBA) governor Michele Bullock has pushed back against the notion that artificial intelligence is already transforming Australia’s economy, suggesting the technology could be a bubble and is not yet delivering productivity gains.
In remarks reported on Tuesday, Bullock described AI as the 'great white hope' but argued that its adoption is so far adding to inflation rather than driving economic growth. Her comments come as the Albanese government has promoted AI as a key solution to Australia's economic challenges.
Speaking ahead of next week's anticipated interest rate decision, Bullock also observed that the recent slump in house prices is deeper than others seen in Australia's recent history.
Bullock's cautious stance adds to a growing global debate about whether AI investment is outpacing tangible economic benefits. While proponents point to potential long-term gains, the RBA chief's remarks highlight concerns that current spending may be fueling price pressures without corresponding productivity improvements.
The governor's comments are significant given the central bank's role in setting monetary policy and its focus on controlling inflation. If AI-related investment is indeed contributing to inflation without boosting output, it could complicate the RBA's efforts to stabilize the economy.