Technology
World Bank President Banga says AI‑driven borrowing costs won’t choke capital
World Bank chief Ajay Banga told CNBC capital remains available despite AI‑linked interest‑rate pressures.
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During an interview on "Squawk Box," Banga said the private capital the Bank oversees does not flow to governments, allowing it to sidestep fears of debt crises and higher bond yields. He highlighted that the institution mobilized $112 billion in 2023—about three times the amount it raised three years earlier.
Banga acknowledged investor worries about "circular financing" and the business model tied to AI, but noted that emerging‑market borrowers are less hesitant because their projects focus on traditional infrastructure such as bridges and roads, and on smaller‑scale AI applications.
In contrast, he said developed‑economy counterparts are seeking funding for large‑scale AI use cases, describing the need as "the exact opposite" of that in emerging markets.
"It's not really an issue," Banga asserted, adding that while AI will be "transformative and profitable," the path will include bumps that are hard to predict. His comments arrive as central banks worldwide prepare to announce a series of interest‑rate decisions, with policymakers gauging AI’s impact on capital demand and employment.
Why it matters: The World Bank’s assurance of ample financing supports continued AI‑driven growth and infrastructure investment, even as borrowing costs rise globally.