The AI boom is no longer just an American story. The Financial Times reports that IMF Managing Director Kristalina Georgieva says the AI investment wave is spreading from the US to the rest of the world — and as countries step up spending on data centers and related infrastructure, AI is turning into a global economic growth engine.
Georgieva said the global economy has actually held up better than expected despite the energy shock triggered by the Iran war and the closure of the Strait of Hormuz. Lower energy demand, the release of emergency oil and gas reserves, more energy supply from outside the Gulf, and growth in renewables and coal production all helped cushion the impact of the energy crisis.
She described the current moment as a "tug of war" between the AI boom and the economic shock from the Iran war. While AI investment is still mostly concentrated in the US, countries that participate in the AI hardware supply chain — and export those products around the world — are benefiting as well.
But Georgieva warned the energy shock isn't over. With oil and gas reserves continuing to shrink and winter approaching in the Northern Hemisphere, another spike in oil prices could push inflation higher and force central banks to raise rates, which would increase government financing costs and drag on economic growth.