AI giants keep borrowing as rates rise, blunting the Fed

The tension is between two sets of actors who normally respond to the same price signal. The Federal Reserve raises rates to make borrowing more expensive, expecting spending to cool. The AI giants, personified by Mark Zuckerberg and Dario Amodei, treat borrowing as a means to an end that sits outside that calculation: securing superintelligence for the West and ushering in an age of intergalactic abundance. Because they believe customer spending on AI has only just begun, the coming revenue is seen as justifying the investment, and an extra 75 basis points of bond interest does not change that view. The result is that the Fed's main lever isn't working so far. Chicago Fed President Austan Goolsbee told the outlet last week that inflation is 'jumping out of its lane,' spreading from AI-linked sectors into unrelated parts of the economy — a description that ties the borrowing behavior directly to the central bank's difficulty. There is a credibility problem for both sides: if mortgages cost 15% while hyperscalers (large cloud providers) keep spending like there's no tomorrow, the public is likely to be angry at both the AI companies and the Fed.