Global Market AI Momentum Showing Signs of Vulnerability
The BIS said investors are growing cautious about AI profits as tech borrowing tops $1 trillion and AI-linked stocks fall.
- The Bank for International Settlements warned on Monday that the AI-driven market rally is showing growing signs of vulnerability, disrupting a year of global economic resilience.
- Frank Smets, the BIS head of economic analysis, cited concerns regarding a "rapid increase in debt and leverage," noting that financing deals are often "off balance sheet" with circularity.
- Aggregate borrowing by tech firms surged from around $22 billion in 2010 to over $1 trillion by 2025, now representing 44% of total private credit.
- Investors are becoming "increasingly cautious" about the profitability of future AI investments, the BIS said, as total outstanding loans of all types approach $2.5 trillion.
- Uncertain global conditions—geopolitical tensions and volatile energy prices—further strain public finances, while Smets noted that complex central bank messaging poses challenges for public communication.
13 Articles
13 Articles
The high boosted by artificial intelligence (AI), which has caused global stock exchanges to fire in the last two years, is showing increasing signs of vulnerability, said on Monday (14) the Bank of International Compensation (BIS), the institution coordinating global central banks. In a new report, the BIS reported that investors are becoming "more and more cautious" about the profitability of future investments in AI, especially as the leverag…
BIS says global market AI momentum showing signs of vulnerability
By Marc Jones LONDON, Sept 14 (Reuters) - The AI-linked rally that has seen world stock markets soar over the last two years is showing growing signs of vulnerability, global central bank umbrella body, the Bank for International Settlements, said on M...
Markets have been in madness for almost three years because of the emergence of AI. But one could soon be at the end of a "bubble", according to indices observed by the Bank for International Settlements.
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