IMF monitoring AI developments, too early to say if AI reassessment underway

The IMF is tracking sharp swings in AI-related share prices and political moves that could slow US data centre construction. It says there is not yet enough evidence to know whether investors are beginning a lasting reassessment of AI investment, profitability or expected productivity gains.

Spokesperson Julie Kozack said AI valuations remain vulnerable to doubts about the technology’s long-term returns. The IMF also sees AI investment and data centre building as one of two major contributors to US inflation, alongside higher energy costs linked to the Iran war and the Strait of Hormuz closure; it expects restrictive Federal Reserve policy to remain necessary to return inflation to 2 per cent.