IMF chief Georgieva warns of inequality due to AI — Dawn

Ahead of the IMF annual meetings scheduled to take place in Singapore, International Monetary Fund Managing Director Kristalina Georgieva said that the rapid development of artificial intelligence could worsen economic inequality worldwide. According to her, the technology is increasingly determining countries’ relative economic positions, while most states remain largely outside this process.

As Dawn reports, Georgieva expects investment in AI relative to GDP to surpass the funds invested in railways, power grids or telecommunications infrastructure. She noted the greatest growth in artificial intelligence-related trade in the United States, China and India, where companies are spending on data centers and other infrastructure. Other countries benefit from chip production and robotics.

Access to AI

The IMF chief stressed that AI is rapidly becoming a key factor influencing countries’ place in the global economy. At the same time, in her assessment, the development of AI-related economies is bypassing most other countries, increasing the risk of deepening global economic inequality.

To harness the technology’s transformative potential, access to AI must be ensured worldwide, Georgieva said. She added that this requires international cooperation that is in countries’ own interests in an interconnected world.

More current news is available on the UA.News Telegram channel Telegram.

Risks for markets and budgets

Georgieva also drew attention to investors’ concerns over the scale of investment in the AI sector and the timeframe for generating returns. According to her, despite a summer decline, technology stocks continued to rise, while Nvidia’s market capitalization reached nearly $5.7 trillion after a record share-price increase on Tuesday.

She warned that lower-than-expected corporate profits could turn investor disappointment into a large-scale shock due to the debt burden of major cloud computing providers and substantial global investment in U.S. stocks.

Separately, the IMF chief called on advanced countries with high debt levels to adopt credible medium-term fiscal consolidation plans. According to her, high bond yields increase debt-servicing costs amid constrained budgets and competing spending needs, including defense.