A surge in artificial-intelligence (AI) investment has helped the U.S. economy avoid a deeper slowdown this year, according to the International Monetary Fund (IMF). While growth is still modest by historic standards, the infusion of capital into AI hardware, software and infrastructure is acting as a significant buffer.
The IMF raised the U.S. growth forecast to 2% for 2025 and 2.1% for 2026 — modest, but still ahead of many peers. It emphasised that high levels of investment in AI technologies have underpinned productivity expectations and buoyed investor optimism.
Still, the fund warned about potential vulnerabilities: inflated tech valuations, inflation pressures driven by rapid capex, and the risk of abrupt corrections if productivity gains don’t follow spending.
For Indian investors, the message is twofold: compliment your domestic exposure with global tech plays, but track valuation discipline and execution outcomes carefully. Exposure to AI themes may offer growth, but market sentiment and macro surprises can reverse momentum quickly.