A rising wave of artificial intelligence investments is under close watch by Federal Reserve officials, who see AI-related demand as a potential factor driving inflation. New York Fed President John Williams’ concerns point to growing challenges for small-business owners, who could feel the squeeze of higher costs.

Four leading tech companies—Microsoft, Meta, Tesla, and Apple—have unveiled mounting costs tied to artificial intelligence. Their latest earnings hint at a surge in industry-wide spending, suggesting not only a transformational shift in technology but also a potential wave of new profit opportunities.