Kathmandu. World Bank President Ajay Bangla has said that while there are concerns that interest rates and borrowing costs may increase due to increasing investment in artificial intelligence (AI), the availability of capital is not a major problem immediately.
“It’s not really a problem,” he said in an interview with CNBC’s “Squawk Box” on Tuesday. According to him, the World Bank mobilized $112 billion in capital last year. That’s almost three times more than three years ago.
He acknowledged that there are concerns among investors about the sustainability of cyclical financing and business models in the investment in the AI sector. However, he said that such hesitancy is comparatively less in emerging economies.
According to him, there is a greater need for investment in building bridges, roads and other infrastructure in emerging economies. Also, these countries are more focused on small and practical uses rather than large and expensive uses of AI. In contrast, there is a greater need to finance large projects of AI in developed economies. He noted that the investment needs of these two types of economies are diametrically opposed to each other.
Because the private capital that the World Bank manages and mobilizes does not go directly to governments, it could be insulated from concerns about rising government debt, debt crises and rising bond yields in some countries, he said.
