The Bank for International Settlements (BIS) has escalated its warning on the risks posed by the artificial intelligence investment boom, specifically highlighting the dangers of debt-financed spending.
The central bank for central banks argues that the rapid accumulation of corporate leverage to fund AI infrastructure could destabilize the global financial system if the expected returns fail to materialize.
According to a report by Rzeczpospolita, BIS experts caution that excessive investment in AI, when funded through borrowing, significantly increases corporate debt levels.
This dynamic creates a fragile foundation for the broader economy, where a sudden correction in AI valuations could trigger a wider financial crisis.
The warning underscores a growing concern among policymakers that the current AI capex cycle is being driven more by competitive pressure and leverage than by sustainable cash flows.
This latest alert builds on previous BIS commentary regarding global economic stability.