Bank of America economist warns US citizens will see prices soar thanks to AI boom
An economist for the Bank of America has warned US citizens that they will see prices soar thanks to a boom in AI technology.
It looks like consumers may be out of pocket due to artificial intelligence resulting in increased utility costs.
This is according to David Tinsley, a Bank of America economist who has warned that this may stem from higher electricity demands to power data centers for AI.
The expert reported that utility payments had risen by 3.6% year-on-year in Q3 for 2025.
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In a note from the Bank of America Institute, which highlighted that AI has sparked ‘a rise in utility bills’, it said: “Rising consumer prices for electricity and gas suggest bill pressure could intensify in the coming months, depending on how the winter weather shapes up.”
Tinsley said: “An important question both for understanding current utility bills and how they will evolve is whether energy demand - most obviously electricity - from the explosive growth in AI and the associated build-out of data centers is also pressuring residential bills?
“BofA Global Research sees manufacturing and data centers as important drivers of electricity demand over the next 10 years. Also worth noting - increasingly residential electrification, including in vehicles, is also pushing electricity demand up.”
The economist went on to add: “Rising demand for electricity from both data center development and manufacturing growth is already being reflected in residential customer rates.
“The impact runs through the spending on enhancements to the transmission and distribution grid required for data center build-outs, which is incorporated into the tariffs of all the ratepayers (residential, commercial and industrial) on the system, and then into both higher energy and capacity pricing.”
However, it doesn’t look like the boom in the AI industry is slowing down anytime soon, so what does that mean for consumers? According to Tinsley, it means people are going to be further out of pocket.
This is because the supply of power is still playing catch up with demand as companies race to develop the latest AI technology for the market.
Tinsley continued: “There is likely further upside ahead.
“Electricity supply is still struggling to catch up with the rapid increases in demand because of the capital intensity and regulatory requirements around building more generation and transmission capacity.”
So, with all of the industry giants throwing their focus to AI development, it might be a cold winter if the cost of energy continues to rise into the following year.