'Love it, hate it, or fear it’: IMF chief Kristalina Georgieva warns AI boom could fuel economic risks

Artificial intelligence (AI) is rapidly reshaping economies and determining the competitive strength of nations, but the technology is also creating new economic risks that governments can no longer afford to overlook, International Monetary Fund (IMF) managing director Kristalina Georgieva has warned.

According to a CNBC report, speaking in Singapore on Wednesday, October 7, ahead of the IMF and World Bank annual meetings, Georgieva urged governments to prepare for the wider economic consequences of the AI boom while also tackling rising sovereign debt.

“Love it, hate it, or fear it, AI is here,” Georgieva said, stressing that policymakers must stop delaying difficult fiscal decisions as debt levels continue to rise globally.

AI infrastructure boom adds to inflation concerns

According to a CNBC report, Georgieva said the global economy is currently facing pressure from two major forces.

The first is a continuing negative energy supply shock, which she attributed to the war in the Gulf, crude oil prices above $100 a barrel and limited refining capacity. The combination has pushed retail diesel prices to record levels.

The second pressure comes from the enormous investment being made in data centres and advanced computing infrastructure. The AI race is requiring significant amounts of capital, creating economic effects that are being felt differently across countries.

Georgieva said the rapid expansion of data centres is adding to inflation concerns in the US, Europe and Asia. Alongside tariffs, higher defence spending and energy-related shocks, she described the AI infrastructure build-out as another force that could contribute to inflation.

IMF warns of financial stability risks

Large amounts of borrowing by hyperscalers, combined with the heavy concentration of global wealth in US equities, could magnify the impact of a downturn in the technology sector, Georgieva cautioned.

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