World Bank chief: “Funding is ample despite concerns over AI investment overheating”

【Financial News, New York = Correspondent Lee Byung-chul】  Concerns are growing that the expansion of AI investment could drive up global interest rates, but financing conditions in international capital markets remain favorable, according to an assessment. Analysts say that despite investors’ concerns over the AI industry’s circular financing structure and profitability, these issues are not having a major impact on infrastructure investment in emerging markets.
World Bank President Ajay Banga said in an interview with CNBC on the 27th (local time) that concerns about funding needs arising from expanded AI investment “are not really a major problem.”
Banga said the World Bank mobilized a total of $112 billion in financing last year, about three times the amount from three years earlier. This means that although the AI industry is generating substantial demand for capital, global investment funds have not been depleted.
However, he acknowledged investors’ concerns about the AI industry’s circular financing structure and business models. Circular financing refers to a structure in which funds circulate among related companies as AI developers, semiconductor suppliers and cloud providers invest in one another or enter into large-scale purchase agreements. Market doubts are growing over whether the AI companies’ enormous investment spending can translate into actual profits.
Banga emphasized, however, that financing conditions in emerging markets differ from those in developed economies. Investment in emerging markets is focused mainly on traditional infrastructure, such as roads and bridges, so the cautious investor behavior seen in the AI industry is not occurring to the same extent there, he explained.
He noted that there is also a clear difference between developed and emerging economies in demand for AI investment. Developed economies are focused on financing large-scale AI adoption, while emerging markets are exploring ways to use AI on a relatively smaller scale. Banga described the funding needs on the two sides as “the exact opposite.”
He also emphasized that the private capital mobilized by the World Bank is not provided directly to national governments. He explained that this can help avoid the possibility of a debt crisis raised in some countries, as well as the burden of rising government bond yields.
He remained optimistic about the AI industry’s long-term growth prospects.
Banga said, “I still believe AI will bring transformative change and achieve profitability,” while adding, “Everyone knows there will be multiple obstacles along the way, and no one knows when the next one will appear.”




[email protected] Correspondent Lee Byung-chul Reporter