IMF: AI Can Boost Growth but Also Increase Tensions

The adoption of artificial intelligence (AI) could raise European productivity by about 1% over five years, but the International Monetary Fund warns of rising inequality, strain on power grids and greater dependence on foreign suppliers.

A document prepared for an informal meeting of European Union finance ministers in Dublin notes that both benefits and costs will be distributed unevenly among countries, regions and workers. More advanced economies are better prepared to use AI and will therefore benefit more.

About 60% of people in advanced European countries work in occupations significantly exposed to AI. For some employees this may raise productivity, but for others the automation of routine tasks poses a threat.

Data centers already consume about 3% of the continent's electricity, and their expansion is straining power grids, particularly in Frankfurt, London, Amsterdam, Paris and Dublin. The fund therefore recommends investing in cross-border infrastructure and the interconnection of energy markets.

Europe may also remain dependent on the United States and China, which dominate model development. This can be prevented through significant investment in its own industry and the completion of the single market, which would help spread the technology and its benefits more evenly.

(Reuters, bak)