Elon Musk says "deflation will be the issue, not inflation" as AI expands production

In an Economist interview filmed at Tesla’s Texas factory, Elon Musk proposed that the U.S. Treasury send payments to individuals, describing the concept as part of an AI-driven future in which paid work becomes optional. He forecast that downward pressure on prices, rather than upward pressure, would become the central economic challenge as artificial intelligence expands production. The remarks followed Musk’s 2025 tenure leading the Department of Government Efficiency, which pursued large federal spending reductions. According to the source, overall federal outlays still rose roughly 6% during the relevant period, and the Government Accountability Office found that significant portions of the claimed savings could not be independently confirmed. Musk presented the payment idea as an expected result of AI abundance rather than a detailed policy proposal.