Warsh picks AI optimists for Fed technology task force

Federal Reserve Chairman Kevin Warsh named leaders for five advisory task forces Thursday, including a three-person artificial intelligence group that will study how new technologies could affect the U.S. economy and monetary policy. The AI panel brings together venture capitalist Marc Andreessen, economist Charles I. Jones and Xbox CEO Asha Sharma, each of whom has recently expressed positive views about AI’s economic potential, according to CNBC.

The Fed said the AI task force will assess the economic impact of new general-purpose technologies, including artificial intelligence, to help inform the central bank’s policy judgments. Warsh selected the task-force members personally, CNBC reported.

The appointments place a group of technology optimists inside an advisory structure at a time when the Federal Open Market Committee is debating whether AI can lift productivity enough to change the inflation and interest-rate outlook. The FOMC, rather than the task forces, sets rates.

AI and the policy channel

Warsh has argued that AI could be one of the most significant changes for businesses, households and the economy during his adult life. At his first press conference as chairman in June, he said AI adoption was “perhaps as important a change in the economy and business and households that we’ve had in my adult lifetime.”

In 2025, Warsh said AI advances could support lower interest rates because faster productivity growth may allow the economy to expand more rapidly without adding inflation. The policy mechanism is straightforward: if workers and firms produce more output per hour, demand can grow without placing the same pressure on prices. If AI mainly raises spending on power, chips and data centers before supply catches up, it can instead add to inflation pressures.

Andreessen, a longtime Warsh friend, became wealthy through early internet browser companies and later became a prominent venture investor. He has been an outspoken supporter of AI. In May, he told podcaster Joe Rogan, “We’ve turned sand into thought,” referring to silicon used in AI chips.

Jones, who recently went on leave from Stanford University to join the Anthropic Institute, has focused recent academic work on AI and growth. In a recent paper, he noted that U.S. per-capita growth has averaged about 2% across much of the country’s history, while adding that if AI automates many constraints in the economy, growth could rise meaningfully, with rates potentially above 5% a year. The same paper also considered weaker outcomes and areas of the economy that may be difficult to automate.

Sharma, who became chief executive of Microsoft’s Xbox business in February, has supported AI while choosing not to make it the centerpiece of Xbox’s consumer experience. In a Bloomberg interview, she said console players were not enthusiastic about that use case, while adding, “Now, do I believe in AI? Absolutely.”

Fed officials remain cautious

The three task-force members did not immediately respond to CNBC’s requests for comment. The Fed declined to comment, CNBC reported.

Minutes of the FOMC’s June meeting, released this week, showed officials discussed whether AI could raise productivity. Some participants saw scope for faster productivity growth, but the minutes said they also viewed the timing and scale of any gains as uncertain. The minutes added that productivity improvements were expected to lag the demand lift from AI adoption.

New York Fed President John Williams said Thursday that AI-related demand was already affecting parts of the economy. He cited rising electricity and semiconductor prices, saying some components had doubled or tripled and describing AI as a “demand shock.” Williams said it remained unclear whether supply would expand enough to help contain inflation.

The Fed is scheduled to meet again at the end of July, when CNBC reported it is expected to leave interest rates unchanged. The task forces are expected to complete their work by year-end.

This story draws on original reporting from CNBC.