UPDATE 1 — Goolsbee says AI — induced inflation is 'jumping out of its lane,' Semafor reports

(Adds details throughout) Oct 13 (Reuters) — Federal Reserve Bank of Chicago President Austan Goolsbee said on Tuesday that inflation is starting to feel like "aggregate overheating" fueled by spillovers from the artificial intelligence investment boom rather than largely being a byproduct of supply shocks that will pass on its own. "This is starting to feel like aggregate overheating, that the AI data center cost increases are jumping out of its lane, that prices are going up in spaces that are not just components in data centers and the directly adjacent industries to data centers," Goolsbee said in a Semafor interview. "If you start to see more of this spreading into general services, that investment goods are just getting GDP (gross domestic product) growth up faster than potential and generating this kind of spillover inflation, that’s problematic because unlike supply shocks where we tend to assume they’re going to go away on their own in a relatively short period of time, nobody thinks that of overheating demand." "It takes a long time for overheated demand to get going, and once it’s going, it’s hard to get rid of that," Goolsbee said. "So that’s why the conventional wisdom