By Marta Vilar – MADRID (Econostream) – European Central Bank Vice President Luis de Guindos said on Monday that markets may be overpricing the economic impact of artificial intelligence, warning that unmet expectations about what AI will ultimately deliver could pose a risk to growth via weaker business investment.
Speaking at the Anuario del Euro conference in Madrid, de Guindos cited three key risks to financial stability: fiscal policy in the US and Europe, elevated market valuations, and high levels of indebtedness in the non-banking sector, including hedge funds and private equity.
On AI, de Guindos said that if expectations surrounding its rollout failed to materialize, “what markets are currently discounting about the impact of artificial intelligence may not come to pass,” creating a potential downside risk for growth linked to corporate investment decisions.
He added that an increasing number of experts had told him that AI evolution may already be approaching its limits, citing bureaucratic hurdles and high costs as key constraints. De Guindos also argued that AI would never be able to think in the same way as a company’s board of directors.
Regarding fiscal policy, he said that Europe’s position was stronger than that of the US, and added that the impact of higher defense spending remained uncertain, given the difficulty in estimating its fiscal multiplier.
De Guindos said the Eurozone was now close to its potential growth rate, which he estimated at between 1% and 1.5%.
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