IMF’s Georgieva Urges Smart AI Regulation, Warns Against Suffocating Innovation

Business Today's Group Editor, Siddharth Zarabi in exclusive conversation with IMF Managing Director Kristalina Georgieva called balancing innovation and regulation the “trickiest question” of the AI era. She warned that excessive red tape can suffocate innovation, which drives prosperity, while stressing the need for carefully designed guardrails to manage major risks. Praising India’s efforts to reduce regulatory burdens, she said more can be done to fully implement reforms and create space for innovation. On Europe, Georgieva noted a shift toward “efficient regulation” rather than deregulation, aiming to protect workers while cutting unnecessary bureaucracy. She advocated for deeper single market integration, capital market union, and freer movement of skills to ensure growth without overwhelming regulatory constraints in a rapidly evolving AI-driven economy.