IMF warns AI boom could fuel global inflation

The International Monetary Fund warned that the rapid expansion of artificial‑intelligence investment is creating new inflationary pressures worldwide. Senior IMF economist Pierre‑Olivier Gourinchas said that massive AI‑related capital flows are inflating the valuations of technology firms, especially in the United States and South Korea, which raises consumers’ sense of wealth and prompts higher spending on travel, housing and big‑ticket goods.

He identified two transmission channels: a demand‑side “wealth effect” that pushes households to spend more, and a supply‑side strain from tighter semiconductor and memory‑chip supplies that lifts production costs. Recent price hikes by Apple and Microsoft on devices linked to higher memory costs illustrate the emerging impact. The IMF also noted lingering energy‑supply uncertainties and rising fiscal pressures on governments as additional risks to price stability.

Gourinchas cautioned that despite the end of the IMF’s current term, the memory of past inflation remains vivid for consumers, making economies especially sensitive to any new price shocks stemming from AI‑driven dynamics.