Warsh Calls AI a Historic Hinge Point, Watches Capex Momentum

After the 2008 financial crisis, “secular stagnation” became a dominant view: abundant capital was chasing too few productive investments. The AI boom is challenging that thesis as spending on chips, data centers, cloud capacity and power infrastructure expands. By treating AI as a potential new factor of production, the Federal Reserve is signaling that the technology could reshape productivity, employment and the economy’s non-inflationary growth potential—variables central to monetary policy.

On Aug. 28, 2026, Federal Reserve Chair Kevin Warsh used his first Jackson Hole keynote to call AI a “hinge point in history.” He said business capital expenditure rose about 9% over the past four quarters, the fastest pace since 2021, with more than half of the increase tied to AI infrastructure. Annualized token sales at the two leading AI labs exceeded $100 billion, up more than 500% from a year earlier. Warsh said he will watch the “second derivative”—whether capital-spending growth continues to accelerate or starts to fade.