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Fed's Bowman: AI Revenue Can't Yet Pay for Data Centres
Fed Vice Chair for Supervision Michelle Bowman said on November 10, 2026, that AI revenue is "not yet sufficient" to pay for data centres. She sees financing risks.
Michelle Bowman, the Federal Reserve's Vice Chair for Supervision, used a speech at the Council on Foreign Relations in Washington on Tuesday, November 10, to put artificial intelligence at the centre of her economic outlook. She repeated the remarks later the same day at an Unleash Prosperity Now event. The speech covered rates and the labour market, but its most quotable line was about whether the AI build-out is paying for itself.
"AI revenues have been rising quickly but are not yet sufficient to pay for the expense" of maintaining models and data centres, Bowman said. She described AI investment as a major driver of growth and, at the same time, a source of risk, noting that the financing of the build-out increasingly comes from outside the companies themselves, through bonds, loans and private credit. If AI revenues disappoint, she said, that is where financial-stability risks would show up, and she is watching for them.
Her view on productivity was patient rather than sceptical. "Over time, I also expect increased AI adoption to raise productivity," she said, adding that this should ease some inflation pressure as production costs fall. But she warned that the payoff may still be early, because firms and workers are still working out the best uses of the technology. In the meantime, data-centre demand is adding to price pressures, which she listed alongside tariffs and energy as the reasons inflation has been stickier than she hoped.
On policy, Bowman did not commit to a December hike. Core PCE inflation was likely 3.3% in October by her estimate and the unemployment rate 4.1%, close to her estimate of its natural level. "Monetary policy is not on a preset course," she said, and the case for more tightening has to be weighed against the costs for rate-sensitive sectors such as housing and small business. The committee will see October PCE and the November jobs report before it meets on December 8-9.
Her remarks landed on the day of a hotter-than-expected CPI report and a day after the Bank of England's governor raised the possibility of an AI share bubble. For investors in AI stocks and the bonds that finance data centres, the message from the Fed's top bank supervisor is that regulators now treat the revenue gap and the borrowing behind it as a stability question, not only a valuation one.
Sources: Federal Reserve Board — Speech by Vice Chair for Supervision Bowman on the U.S. economy and considerations for monetary policy (Nov 10, 2026)