A rapid surge in artificial intelligence is helping prop up the world economy — but the International Monetary Fund is warning that the same boom could also set the stage for a painful financial jolt.
In its latest Global Financial Stability Report, released on the second day of the IMF and World Bank annual meetings in Bangkok, Thailand, the Fund said the global financial system faces “elevated” risks, including an AI-driven market correction and cyber threats that could carry “severe” consequences.
“These risks are plausible near-term catalysts for a sharp tightening of financial conditions and market turmoil,” the report said.
The IMF noted that the recent burst of activity around AI — alongside the scramble to produce semiconductors and construct data centres — has supported global growth even as geopolitical tensions persist, including the war in the Middle East.
While AI is increasingly a source of economic vitality globally, it is also presenting unprecedented risks, the Fund said (stock image) Still, the Fund cautioned that optimism about AI may be running ahead of reality.
It pointed to “growing evidence” that advanced AI systems can be developed with less investment than previously assumed, or that the overall economic payoff “may not be as large as expected.” “Weaker or less durable AI investments and profitability could be a shock that triggers a market correction,” the IMF warned.
In the report’s assessment, AI has become a driver of economic vitality in many countries, but it is also opening the door to risks the global financial system has not had to confront at this scale.
