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Macro Picture
Oct 15, 2026

The AI Investment Boom and the Risk of Crowding Out

Nato Balavadze

In this paper, we discuss:

  • Why the AI investment boom risks crowding out other sectors;
  • How unprecedented AI spending is intensifying competition for resources;
  • Why rising input costs are creating inflationary pressures;
  • How AI investment is weakening monetary policy transmission;
  • Whether AI productivity gains can justify the investment boom and offset broader economic risks.

Download PDF: AI Crowding Out Effect – October 2026

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