(Washington, agencies) The International Monetary Fund (IMF) is closely monitoring recent developments in artificial intelligence (AI) and the impact of sharp swings in stock valuations on equity markets, the economy and financial stability, spokesperson Julie Kozack said on Thursday (12 November).
Kozack told a regular press briefing that it was too early to judge whether investors had turned bearish on the sector over the long term. The IMF was also monitoring political developments in the US that could slow data centre development.
Kozack said: “at this point it’s really too early to say whether there’s going to be some broader reassessment of investment in AI technology and any broader reassessment of profitability and future productivity gains.”
She also said observations over the recent period alone were insufficient to conclude that potential changes in AI investment would affect inflationary pressures in the US.
After Nvidia chief executive Jensen Huang announced his resignation, Nvidia shares plunged on Thursday, rattling equity markets and dragging down the S&P 500 and Nasdaq indices. However, some major technology stocks rose, including Nvidia rival Advanced Micro Devices, Alphabet and Microsoft.
Kozack said the IMF saw two main factors driving US inflation: increased demand fuelled by AI investment and data centre construction, and higher energy prices caused by the US-Iran war and the closure of the Strait of Hormuz. Under the current circumstances, the Federal Reserve needed to maintain tight monetary policy to bring inflation back down to its 2% target.
