The AI infrastructure gold rush is making it awfully hard for the Federal Reserve to cut rates — and Bitcoin is taking the hit. Goldman Sachs now expects AI-related capital spending to reach nearly $800 billion in 2026, lifting overall business investment by a projected 7.8% and adding roughly 3.3 percentage points to capital-expenditure growth. TrendForce puts the nine biggest cloud providers' combined outlay near $830 billion, a staggering 79% jump over last year. That kind of spending doesn't happen in a vacuum.
The math behind the buildout
Microsoft alone attributes about $25 billion of its $190 billion total budget this year to pricier memory and components — the kind of costs that ripple through supply chains. Goldman's longer-range model sees annual AI capex climbing from around $765 billion this year toward $1.6 trillion by 2031. That's a lot of concrete, chips, and power, and it's already showing up in the price tags for everything that goes into a data center.
What the Fed is saying
Fed Governor Lisa Cook flagged the problem in recent remarks: electricity and water prices have each climbed about 5% over the past year; chips, high-tech equipment, and software have grown more expensive; wages in specialty construction trades have picked up. Jerome Powell was blunter, saying the AI construction frenzy is 'putting pressure on all kinds of goods and services' and 'probably pushing inflation up.' Cook warned that 'yet another shock to prices could be layered on from the heightened investment demand due to AI' and noted companies have announced more than $1.5 trillion in data-center plans, with only a sliver actually built. Translation: more price pressure ahead.
Rate cut odds evaporate
Markets now put the odds of a Fed hold at the June 16-17 meeting above 93% — the meeting chaired by Kevin Warsh. Every dollar of AI-related price pressure gives the central bank another reason to keep rates where they are. For risk assets, that's a headwind. Bitcoin slid to around $63,600 by June 4, roughly half its October 2025 record and down more than 13% over the week. The connection isn't subtle: when rate cuts look less likely, speculative money gets less adventurous.
The real test comes June 16-17, when the Fed — now under Warsh — releases its next rate decision and dot plot. If the AI capex numbers keep rolling in hot, don't expect any easing language. For crypto traders, the message so far is that cheap money isn't coming back anytime soon.
