AI Surge Could Widen Global Inequality, Warns IMF Chief

COLOMBO (News 1st); The global surge in artificial intelligence (AI) investment is generating unprecedented optimism, particularly in the United States, but it also poses risks of deepening economic divides, according to Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF).

Georgieva noted that the U.S. currently leads the world in AI investment, far outpacing other nations. “When we look at the distribution of AI investments, the U.S. stands very tall—and then comes the rest of the world,” she said.

Georgieva emphasized two critical factors for AI to deliver meaningful economic impact: energy availability and sectoral integration.

“When we look at the demand for energy for AI, it is equivalent to half of the energy consumption of the United States. It is really big,” she warned. “And AI will only be valuable if it significantly boosts productivity and growth across sectors.”

According to the IMF’s assessment, AI could contribute between 0.1% and 0.8% to global GDP growth—a potentially transformative boost, especially as global growth hovers around 3%.

However, Georgieva cautioned that AI’s benefits are not evenly distributed. To address this, the IMF has developed an AI Preparedness Index, ranking 174 countries based on four key criteria: digital infrastructure, labor market skills, innovation and sectoral penetration, and regulation and ethics.

The findings reveal a stark divide: advanced economies and some emerging markets, including China and Gulf nations, rank in the top third, while low-income countries lag significantly behind.

“ So, the risk we see is that we may end up in a world in which there is an increase in productivity, but it is also a source of divergence within countries and across countries,” Georgieva warned. “Preparedness really matters. So, we do not really have much time as societies to be ready for AI.”