IMF Chief warns of growing AI divide and lack of regulation

Speaking at the opening of the IMF and World Bank annual meetings on October 13, Georgieva cautioned that the AI revolution is unfolding unevenly, with advanced economies such as the United States leading the way while developing countries risk falling further behind.

“The IMF is quite worried that the gap between advanced economies and low-income countries on readiness for AI is growing,” she said. “It is making it harder and harder for developing countries to catch up.”

Growing Inequality in AI Readiness

While countries like China have made progress in developing AI capabilities, most developing nations still lack the digital infrastructure and skilled workforce required to take advantage of the technology, Georgieva noted.

The IMF has advised countries to first strengthen their digital foundations, such as education, innovation, and connectivity, before attempting widespread AI adoption.

Last week, Georgieva also warned that global financial markets were showing signs of “AI-driven exuberance,” similar to the dot-com boom two decades ago — a trend that could threaten global growth if sentiment reverses sharply.

Lagging on Ethics and Regulation

The IMF recently developed an AI Preparedness Index, assessing national readiness across four key areas — infrastructure, labor and skills, innovation, and regulation and ethics.

“Where the world is falling shortest is on regulation and ethics,” Georgieva said. “The regulatory ethical foundation for AI for our future is still to come into place.”

She urged civil society to act as a watchdog, ensuring that AI development serves the public interest rather than deepening inequality.

“Ring the alarm bells in your countries that staying still is falling behind,” Georgieva concluded.
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