Sarah Hunter, the RBA's Assistant Governor (Economic), asked what cheaper AI means for the economy at the UBS Australasia Conference in Sydney on 9 November 2026 [S1, P4].
Hunter framed the falling price of artificial intelligence as a macroeconomic variable in a talk titled "What Happens to the Economy as 'Intelligence' Gets Cheaper?", posted on the RBA website S¹. That marks a departure from how central banks have typically treated AI — as a sector-specific trend rather than an input whose cost reaches across the whole economy. The full speech text is not included in the available sources, so its specific arguments and any policy implications cannot be reported here; no error bars, cost benchmarks, or model-level data have been checked against the speech's claims.
My read: The title is doing most of the work. A central bank economist does not ask "what happens" about something she considers settled. Hunter is flagging genuine uncertainty about how falling AI costs move through productivity, wages, and prices. I would watch whether the RBA's next Statement on Monetary Policy picks up any of this language, and whether the speech distinguishes between cheaper inference, the cost of running models, and cheaper training, the cost of building them, because those reach the real economy through different channels.
What is verifiable is the event itself. Hunter was appointed the RBA's Chief Economist and Assistant Governor (Economic) in 2023 P³. She chose a room of bank analysts and fund managers as the venue for this question. She has been building toward the theme: in November 2025, she answered questions on the economic outlook at the Australian Industry Group Executive Luncheon in Sydney P⁶. The jump from a general economic discussion to a speech specifically about cheaper intelligence suggests the RBA is moving from observing AI from a distance to engaging with its price dynamics directly.
Cheaper AI could shift the inflation calculus the RBA watches
The RBA's core job is setting the cash rate to manage inflation and employment. The rate sat at 4.85% as of early November S¹. If cheaper AI lifts productivity, it could ease inflationary pressure without rate cuts. If it displaces workers faster than it creates new roles, it could do the opposite. Hunter's title puts both possibilities on the table without resolving them.
The question lands as the cost of running AI models is falling. A GitHub project called AvengersPro, which packages a 2025 paper titled "Beyond GPT-5: Making LLMs Cheaper and Better via Performance-Efficiency Optimized Routing", claims to cut the cost of large language model inference by directing queries to smaller models where a large one is not needed P⁵. The repository has 223 stars and was created in August 2025. No one outside the authors has independently verified the performance claims; the figures are the project's own, no released code has been audited externally, and no error bars or third-party benchmarks accompany them.
This is the kind of cost reduction that makes Hunter's question concrete. When intelligence, the input to an expanding range of business processes, gets cheaper, the effects do not stay inside the tech sector. AI agents are already moving into commercial workflows. The hardware layer is getting cheaper too, with speech models and agent controls now running on local GPUs.
The next signal is in the RBA's formal statements
For a mortgage broker writing loans at the current 4.85% cash rate, the practical shift is that the institution setting their cost of funds is now weighing whether AI-driven productivity could change the inflation outlook before the next rate decision — meaning the broker's rate-sheet assumptions may need revisiting sooner than a pure demand-side reading suggests. For a small-business owner weighing a hire, the same signal means the RBA might hold rates flat on AI optimism even if local trading conditions soften.
Hunter delivered the speech on 9 November 2026. The tell will be whether that language appears in the RBA's next Statement on Monetary Policy.
Sources: S1 — What Happens to the Economy as ‘Intelligence’ Gets Cheaper? · S2 — What Happens to the Economy as ‘Intelligence' Gets Cheaper? | Speeches · P3 — Appointment of Chief Economist | Media Releases | RBA · P4 — What Happens to the Economy as ‘Intelligence' Gets Cheaper? | Speeches · P5 — ZhangYiqun018/AvengersPro · P6 — Transcript of Question & Answer Session on 20 November 2025 | Speeches · P7 — Sara
Written from 7 sourced items, 6 of them primary.
