Episode 70: AI Capex: The Trillion-Dollar Inflation Time-Bomb
Nov 30, 2025
This discussion dives into the multi-trillion-dollar surge in AI infrastructure, exploring its inflationary potential amidst productivity gains. The impact of U.S. reshoring and rising memory costs creates a fascinating tension in credit markets. AI is found to enhance rather than replace jobs, driving a consulting boom, as firms adapt to new technologies. Furthermore, the strategic moves of hyperscalers signal competitive dynamics while increasing debt levels raise concerns about financial stability. It's a critical look at AI's dual role in productivity and inflation.
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insights INSIGHT
AI Capex Can Be Inflationary
AI could be inflationary if the $5–7 trillion data‑centre build creates supply bottlenecks and excess demand.
Productivity gains may be disinflationary long run, but near‑term capex effects can push prices up.
insights INSIGHT
Reshoring Raises Inflationary Risk
US reshoring, tariffs and decoupling from China coincide with the AI data‑centre build and amplify inflationary risk.
Concurrent trade frictions and industrial policy raise input costs and reduce supply flexibility.
question_answer ANECDOTE
Radiographers Grew With AI
Radiographer employment rose despite fears AI would decimate the role.
AI automated mechanical tasks and let radiographers increase imaging volumes and handle complex care.
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Welcome to the Complexity Premia podcast by Coolabah Capital, hosted by Christopher Joye, Chief Investment Officer and Portfolio Manager at Coolabah Capital, and Ying Yi, a Senior Portfolio Management Director at Coolabah Capital. The Complexity Premia podcast strives to deconstruct modern investment problems for wholesale (not retail) participants in capital markets. You can listen on your favourite podcast app, or find it on Spotify, Podbean or Apple Podcasts.
In this episode, Chris and Ying Yi unpack the macro consequences of the AI build-out, exploring how the multi-trillion-dollar data-centre capex boom, rising memory costs, and U.S. reshoring are reshaping inflation, credit markets, and central-bank policy. They also assess why AI-exposed sectors like management consulting are expanding—not contracting—as AI augments human productivity.
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