Australia’s Central Bank Warns AI Investment Has Yet to Deliver Clear Productivity Gains

VoS NEWS DESK | TECHNOLOGY & ECONOMY | 23 September 2026

Michele Bullock addressed the economic impact of artificial intelligence at a CEDA event in Australia, where she discussed the rapid growth of AI investment and its potential consequences for the wider economy.

AI has attracted enormous levels of investment globally, with businesses spending heavily on computing infrastructure, data centres, software and new AI systems. Governments have also identified artificial intelligence as an important technology for future economic growth.

However, Bullock said there was not yet clear evidence that this investment was translating into stronger productivity in Australia. Productivity generally refers to the amount of economic output generated from a given amount of labour and other resources.

The RBA governor also raised the possibility that the surge in AI-related investment could contain elements of a financial bubble. She stressed that she was not declaring that AI was definitely a bubble, but said the possibility represented a risk that central banks were monitoring.

One of the concerns is the amount of capital being directed towards data centres and computing infrastructure. These facilities require significant quantities of electricity, construction materials and other resources. Rapid expansion can therefore increase demand and add to inflationary pressures.

Bullock noted that AI was widely expected to become an important source of productivity growth. However, the economic benefits may take time to appear because businesses need to change their systems, train employees and reorganise how work is carried out before the technology can produce measurable efficiency improvements.

The governor referred to research from South Korea examining AI use and workplace performance. According to the discussion, some AI users spent less time working without achieving a corresponding increase in output, highlighting the uncertainty surrounding the technology's immediate productivity impact.

Australia has been incorporating expected technological improvements into its longer-term economic outlook. The government has highlighted AI as a potential contributor to future productivity and economic growth, while economists and central-bank officials continue to assess how quickly those benefits may appear.

The issue is particularly important for monetary policy. If AI investment increases demand without producing an equivalent increase in economic capacity, it could add to inflation rather than reduce production costs.

Bullock's comments also came as Australia's economy faces wider challenges involving interest rates, housing and inflation. The RBA has been closely monitoring price pressures while considering the appropriate level of interest rates.

The housing market has also been under pressure, with Bullock discussing falling house prices and the effects of higher interest rates and property-tax changes. She also said immigration had supported economic growth, although increased population growth can add pressure to housing supply when construction does not keep pace with demand.

The AI debate extends beyond Australia. Major economies including the United States, China and European countries are investing heavily in artificial intelligence, while companies are spending billions on chips, data centres and AI development.

Investors have also placed significant value on technology companies connected to AI. This has raised questions among economists and central banks about whether financial markets may be pricing in future productivity gains before those gains have become visible in economic data.

At the same time, AI has the potential to transform industries ranging from manufacturing and financial services to healthcare, education and professional services. The long-term economic impact will depend on how effectively businesses integrate the technology into everyday operations.

For Australia, the key question is whether current investment will eventually result in higher output, greater efficiency and stronger economic growth. The RBA's comments suggest that officials are watching this transition carefully rather than assuming that higher AI spending will automatically produce higher productivity.

VoS STRATEGIC INSIGHT

The RBA's position highlights the difference between investment in AI and measurable productivity gains from AI. Large amounts of capital are being committed to the technology, but the economic benefits may take time to appear as companies adjust their processes and workers adapt to new systems.

The discussion also shows why central banks are monitoring the AI boom from both an economic and financial-stability perspective. If AI investment eventually produces substantial efficiency gains, it could support economic growth; if investment grows faster than its productive benefits, it could create additional inflationary or financial risks.

Source: Reserve Bank of Australia; The Guardian; CEDA.