AI infrastructure spending is helping the global economy maintain growth of around 3%, while creating a financial windfall for Asian hardware suppliers, IMF Managing Director Kristalina Georgieva said in Bangkok, where finance officials gathered for the Fund’s annual meetings.
An investment shock cushioning the energy supply problem
Georgieva described the AI boom as both a demand and investment shock, Reuters reported. She said the spending has helped keep output from falling further, even as disruptions to energy supplies continue to weigh on economic activity.
“So that shift into higher gear is what is keeping the world economy growing at around 3%, despite the fact we are being dragged down by the energy supply shock,” she told the IMF and World Bank gathering in the Thai capital.
The 3% figure matches the projection the Fund issued in July, and an updated World Economic Outlook is scheduled for release on Tuesday, October 13. The update will give the first read on whether the AI capital cycle has bettered the Fund’s numbers in any way.
Where Asia’s hardware makers fit
Countries supplying the hardware needed to expand AI infrastructure stand to gain the most from the spending, and Thailand is among those best positioned to benefit, according to IMF Managing Director Kristalina Georgieva.
The growth boost is expected to differ across Asia. Advanced economies in the region could see growth rise by 0.5 to 1 percentage point, while emerging markets could gain 0.2 to 0.8 percentage points, according to Traders Union.
The United States, China and India continue to lead AI development. Still, the rising demand for data centers, components and related equipment is extending the investment boom beyond AI leaders to manufacturers across the Asian region.
The meetings are expected to draw around 18,000 people, including officials from the IMF’s 191 member countries. US Treasury Secretary Scott Bessent and Spanish Finance Minister Arcadi España are reportedly set to miss the meetings to attend to domestic matters.
IMF gives labor warning alongside growth story
Georgieva paired her optimism with a warning, calling AI “a slow-moving tsunami” that could eventually augment, downgrade or eliminate 40% of jobs. She also pointed to an early study showing that 10% of US jobs already require AI skills.
Jobs involving routine, repetitive tasks are becoming less common, while hiring is growing in some lower-paid sectors, including construction and data centers. The shift from labor to capital also presents a challenge for governments, which may need to overhaul their tax systems as more economic value accrues to capital and not just workers.
Singaporean President Tharman Shanmugaratnam also warned that entry-level job opportunities, especially for recent graduates, are already shrinking, and countries that are slow to adapt risk making the gap between richer and poorer economies much wider.
World Bank bets on small-scale tools
World Bank President Ajay Banga said poorer economies could benefit from a more practical approach to AI, focusing on smaller applications that require less computing power instead of attempts to compete in the race to build LLMs.
The World Bank is supporting the use of these tools in sectors such as agriculture, healthcare and education, Reuters reported.
The aim is to let developing countries put AI to practical use without building out costly infrastructure first. It remains to be seen if that would keep them in the game, as countries with weaker technology bases risk falling behind since capital flows to the suppliers and producers already positioned to take advantage of the AI boom.
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