The head of the International Monetary Fund warned the World Economic Forum on Friday that artificial intelligence will cause a “tsunami in the labor market”, with young people most affected.
Kristalina Georgieva told delegates in Davos that the IMF’s own research shows there will be big changes in demand for skills as technology becomes increasingly widespread.
He said, “We expect that over the next years, in advanced economies, 60% of jobs will be affected by AI, either growing or being eliminated or transformed – 40% globally.” “It’s like a tsunami hitting the labor market.”
He suggested that in advanced economies, one in 10 jobs have already been “augmented” by AI, increasing the wages of these workers, which would benefit the local economy.
In contrast, Georgieva warned that AI would erase many of the roles traditionally played by younger workers. “The jobs that are eliminated are usually the same ones that currently hold entry-level jobs, so it is harder for young people looking for a job to get a good placement.”
Meanwhile, people whose jobs were not directly transformed by artificial intelligence risk being squeezed out, he said, with their wages potentially falling without the productivity gains from AI.
“So the middle class, inevitably, is going to be affected,” Georgieva predicted.
He said his biggest fear is that AI is inadequately regulated. “It’s moving so fast, and yet we don’t know how to make it safe. We don’t know how to make it inclusive. Wake up, AI is real, and it’s changing our world faster than we can keep up with it,” she said.
Much of the debate has been hijacked this week at the annual meeting of business and political elites in a Swiss ski resort Donald Trump’s tariff threats On the future of Greenland.
But many delegates were also keen to highlight the risks and benefits of AI. Kirsty Hoffman, general secretary of UNI global union, told the Guardian: “It’s just a basic premise that the purpose of AI on the business side is to increase productivity, therefore reduce costs – which will cut jobs.”
“I think now is the time to acknowledge that disruption – and how to manage that disruption,” he said, calling for productivity gains to be distributed fairly across the economy.
“We want to share in the benefits. We’re not going to stop AI, nor do we even want to try – but we also don’t want it to take over us.” He called on employers to discuss their role with workers and their representatives before introducing AI tools.
Earlier in the week at Davos, Satya Nadella, Microsoft’s chief executive, warned that AI could lose its “societal permission” to compete for resources like energy, for example, if it fails to generate advantages beyond a few powerful tech firms – such as through the rapid development of effective new drugs.
Georgieva was speaking on a panel with European Central Bank President Christine Lagarde, who warned that the AI boom could be hampered by growing mistrust between rival economies as the US raises tariff barriers.
“We depend on each other,” he said, pointing out that AI is capital intensive, energy intensive and data intensive. If countries don’t work collaboratively and “define new rules of the game,” there will be less capital and less data, he said. “We are in trouble, let’s face it,” he said.
Lagarde also warned about rising global inequality, highlighting “inequality that is becoming deeper and bigger”.
In Davos earlier in the week, Mark Carney, the Canadian prime minister, urged delegates to confront the permanent “breakdown” in the global economic order and unite against unregulated US trade policy.
But Lagarde said she was less depressed. “I’m nothing like Mark,” he said. “I’m not sure we should be talking about breaking up. I think we should be talking about alternatives.”
