AI Investment Lifts Global Demand and Inflation Before Productivity Gains

International Monetary Fund (IMF) Managing Director Kristalina Georgieva said artificial intelligence investment is lifting global demand and inflation as spending on data centers, chips, power systems and related infrastructure accelerates ahead of potential productivity gains.

“AI is a positive demand shock today and a positive supply shock tomorrow, rolled into one,” Georgieva said.

The near-term effect is being driven by the scale of upfront investment. Demand for computing capacity and energy is increasing output and prices, while productivity gains that could expand supply are expected to emerge later. Global annual potential growth could eventually rise by 0.1 to 0.8 percentage points as productivity improves.

AI-related technology investment contributed an estimated 0.5 percentage point to U.S. gross domestic product growth in 2025. Private-sector AI investment could exceed $2 trillion globally in 2026.

The investment cycle is also reshaping energy demand. Data centers account for about 3% of Europe’s power consumption, and AI-related energy demand could triple by 2030.

The United States and economies integrated into the AI value chain, including South Korea, are seeing growth supported by surging investment in AI and related power projects. Global growth for 2026 was expected to be around 3% as of Sept. 1, while worldwide public debt was nearly 100% of GDP.

The benefits are unlikely to arrive evenly across economies or workers. AI could affect up to 60% of jobs in advanced economies, and about one in 10 job vacancies in those economies requires at least one new skill.

Financial risks could increase if companies rely heavily on debt to fund AI spending or if expected returns fail to materialize. Rising leverage, circular financing and large cross-border holdings of U.S. equities are potential channels for an AI-related market shock.

“With large upfront investment in AI infrastructure … a positive demand effect likely dominates in the short run,” Georgieva said. The immediate investment boom therefore remains distinct from the potential longer-term productivity gains that could expand supply and moderate inflation.