International Monetary Fund managing director Kristalina Georgieva said in Singapore on 7 October that AI could add up to 0.5 percentage points to annual global growth over time if it is done right, TASS reported. She also expects AI investment, measured against global GDP, to reach or exceed the scale of spending on railways, electricity grids and telecommunications networks.
Key points
- Georgieva put the potential gain at up to 0.5 percentage points of extra annual world growth over time.
- She estimated that AI hardware and related technology products account for more than one-tenth of world goods trade.
- She warned that weaker-than-expected AI earnings could trigger a far-reaching market shock.
The IMF’s 0.5-point growth estimate
Georgieva described the growth figure as a finding suggested by IMF research, conditional on AI being done right. It is a potential addition to the annual rate of world growth over time, rather than a gain she said would arrive in a particular year.
Her investment comparison is similarly forward-looking: she said the global ratio of AI investment to GDP will probably reach or surpass the ratios associated with building railways, electricity grids and telecommunications networks. That places the current spending surge in the company of major infrastructure buildouts, without making the prospective growth gain a certainty.
AI goods trade concentrates in Asia-Pacific
Georgieva estimated that AI hardware and related technology products account for more than one-tenth of global goods trade, a share she said is rising. She linked the increase to investment by countries in the AI supply chain and identified India, China and the US as the biggest beneficiaries, alongside Asian suppliers of microprocessors, memory, chip-making equipment and robotics.
Seven of the top 10 countries for AI-related trade are in the Asia-Pacific region, AP reported. Georgieva warned that the boom is bypassing most other countries and could widen economic inequality across the world.
Georgieva warns of an earnings shock
Georgieva said there is a lag between heavy AI investment and the arrival of its benefits. She warned that if earnings fall short, borrowing by hyperscalers and large, growing global holdings of US equities could turn that disappointment into a far-reaching shock.
The warning concerns both the companies financing AI infrastructure and investors exposed to US shares. AI Affairs previously reported the Bank of England’s warning about AI debt risks alongside analysts’ $4.1 trillion projection.
Georgieva calls for AI rules and worker training
Georgieva urged governments to regulate AI, train workers, make labour markets more flexible and support entrepreneurship. She also called for stronger energy security, while warning that AI is raising demand for energy and putting upward pressure on prices for fuel, fertiliser, food and other commodities.
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