Fed's Williams says AI chip shortage may last more than two years
Why chip supply matters to the Federal Reserve
New York Fed President John Williams said the shortage of AI equipment could take more than two years to catch up with demand. He made the comment during a Bloomberg interview on Oct. 13, 2026.
Williams warned that the rush to build AI infrastructure is pushing up prices for chips and other goods that use them. That, he said, adds to inflationary pressure in the economy.
When asked whether AI supply and demand would balance within two years, Williams replied: "I think it's going to take longer. Assuming the demand kind of impulse continues as expected, and that's a big assumption."
Key points
- Williams said AI equipment supply may take more than two years to meet demand.
- The AI buildout is raising chip prices and costs for related goods, adding inflationary pressure.
- He reaffirmed that the Federal Reserve may need one more interest rate hike this year.
- Williams expects AI investment to stay strong even if rates rise.
What the Fed official says about rates
Williams said his view has not changed: "I haven't changed my view that it may be appropriate to have one more rate hike."
On the outlook for 2027, he said, "we'll have to see" and added, "I don't think at this time I have any reason to believe that we would need to do more."
Why AI funding stays strong despite higher rates
Williams said investors in AI appear to be relatively insensitive to interest rates. He explained that backers see huge productivity gains and major economic transformation ahead.
"I think that happens not completely invariant to interest rates, but I don't expect monetary policy to be really having a deep effect on that," he said.
What this means for Bitcoin miners
An AI equipment supply shortage could affect Bitcoin miners that are expanding into the AI sector. Miners already compete for chips and power equipment alongside AI companies.
The article notes that IREN signed $2.8 billion in new AI cloud contracts in July. It also reported that miners pursuing AI projects face substantial financing needs and increasingly selective lenders.
What is confirmed
Williams' comments are confirmed by the Bloomberg interview transcript published on Oct. 13, 2026. The details about IREN's $2.8 billion contracts and the reporting on miner financing come from Cointelegraph coverage cited in the source article.
What is still unclear
Williams acknowledged uncertainty around future AI demand, calling it a "big assumption" that demand impulses will continue as expected. The timeline for supply recovery beyond his "more than two years" comment is not specified.
Why this matters for crypto investors
Bitcoin miners are diversifying into AI, which increases competition for the same chips and infrastructure that AI companies need. Any prolonged shortage could raise costs for miners and slow their expansion plans. Higher interest rates also affect borrowing costs for capital-intensive projects like AI buildouts.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.