The issue was first raised last month, when Pershing Square CEO Bill Ackman, in a post on X, expressed skepticism that higher rates would reduce demand and investment in AI. <\/p>\n
“What if higher rates don’t reduce demand and investment because the demand for intelligence and energy is unaffected by higher rates because winning the race for super intelligence has a near-infinite ROI and the demand for compute will remain incalculable,” Ackman wrote. “What if the old models don’t apply to the current paradigm?” <\/p>\n
Warsh pointed out that credit spreads for certain assets have widened since the Fed raised rates in September, and financial conditions have tightened as investors have differentiated between tech firms and other companies in their investment decisions. <\/p>\n
“With respect to the new technology and this investment surge, do interest rates matter? I believe they do,” Warsh said. “And I don’t believe that they’re somehow divorced from the rest of the economy.” <\/p>\n
The comments come as the economy grew faster than expected<\/a> in the third quarter, fueled largely by AI investments. <\/p>\n Joe Brusuelas, chief economist for RSM, noted that if one is looking for evidence of AI-driven growth, the details of the third quarter GDP are instructive. A nearly 13% increase in private nonresidential investment \u2014 likely data centers \u2014 along with a more than 20% increase in equipment outlays is rare, he noted. <\/p>\n Also, spending on information processing equipment contributed 0.86% to GDP, computers and peripherals contributed 0.72%, and software 0.23%. Intellectual property was up 8.4%. <\/p>\n “The idea that AI-led investment is sensitive to rates is in the conversation. Sure does not look that way following the September rate hike,” Brusuelas wrote on X<\/a>. <\/p>\n Moody’s chief economist Mark Zandi also believes there’s merit to the notion that AI isn’t sensitive to higher rates. <\/p>\n<\/a> Federal Reserve Chairman Kevin Warsh speaks at a press conference on Oct. 28, 2026, in Washington, D.C. (AP Photo\/Julia Demaree Nikhinson) \u00b7 AP Photo\/Julia Demaree Nikhinson <\/p>\n