World Bank President Ajay Banga said on Tuesday that capital remained available despite concerns that artificial intelligence could send interest rates higher. In an interview with CNBC, Banga stated that capital availability "is not really an issue." The World Bank mobilized $112 billion last year, around three times higher than the amount it had mobilized three years earlier, according to Banga's comments.
Banga acknowledged that some investors worry about circular financing and business models tied to AI investments. However, he noted a key difference in how emerging markets approach artificial intelligence funding compared to developed nations. Emerging markets focus more on infrastructure projects such as bridges and roads, and they pursue smaller-scale applications of artificial intelligence, Banga said. Developed countries, by contrast, seek funding for large artificial intelligence use cases, which he described as the "exact opposite" need.
The World Bank leader also highlighted a structural advantage of the private capital the organization oversees. Because this capital does not go directly to governments, the World Bank can sidestep concerns about looming debt crises and challenges related to rising bond yields in certain countries, Banga explained.
Banga expressed overall optimism about artificial intelligence despite near-term challenges. "In general, I still believe that AI is going to be transformative and profitable," Banga said on CNBC. "But everybody sees bumps in the road from here to there, and no one knows when the next bump will come." His comments come as central banks worldwide prepare for interest rate decisions and policymakers attempt to gauge how widespread artificial intelligence adoption affects demand for capital and employment.
For borrowers and investors in emerging markets, this means the World Bank expects capital to remain accessible for infrastructure and smaller artificial intelligence projects despite global concerns about rising interest rates tied to artificial intelligence spending.