On October 5, Shinichi Uchida, the Deputy Governor of the Bank of Japan, highlighted that artificial intelligence (AI) is sparking a notable surge in demand. This, in turn, is fueling inflationary pressures and pushing up long-term interest rates, potentially affecting neutral interest rates. On the one hand, AI induces positive demand shocks, placing upward pressure on both the economy and prices. On the other hand, it can also positively influence the supply side by boosting productivity and expanding the capital stock, thereby impacting neutral interest rates. Uchida noted that the neutral interest rates set by global central banks might initially be compelled to rise due to the proliferation of AI, yet the long-term implications remain uncertain. He pointed out that while the surge in AI-driven demand has lifted stock prices, relaxing financial conditions, the widespread issuance of debt by tech firms has also driven up long-term yields, tightening financial conditions. Furthermore, AI has the potential to swiftly make certain types of human capital obsolete, especially those skills tailored for intellectual labor, and may intensify social inequality, as individuals with stronger technical skills and adaptability are more likely to gain greater advantages.