BIS chief warns debt‑driven AI spending could threaten financial stability
AI investment surge raises stability concerns
BIS chief Pablo Hernandez warned that the fast‑growing, debt‑financed AI spending could threaten global financial stability if the projects fail to deliver expected profits.
Key points
- The five biggest technology firms plan to spend more than $1 trillion on AI projects in 2025‑2026.
- Global AI‑related investment could rise from about $500 billion today to $3‑$4 trillion by 2030.
- Financing is increasingly done through debt and private credit, which can be opaque and hard to value.
- A sharp decline in AI stocks could reduce household spending and spread to other markets, especially because U.S. equities dominate global indexes.
- Historical episodes such as railway and dot‑com booms showed similar patterns of over‑investment and later corrections.
Official remarks
In a speech on 10 September 2026, Hernandez said the capital outlays of leading AI companies are outpacing their cash flows and rely heavily on debt. He compared the situation to past technology‑driven bubbles, noting that “all drew in more capital than eventual returns could justify.” He cautioned that a correction could have economy‑wide effects.
Additional data
Bridgewater Associates reported that Microsoft, Alphabet, Meta and Amazon – together worth about $12 trillion in market value – expect to spend $650 billion on AI infrastructure in the current year. The same source highlighted that AI could boost productivity in coding, consulting and professional writing.
Potential impact
If AI investments do not meet profit expectations, the debt‑heavy financing could create losses for lenders and investors. Because U.S. stocks make up a large share of global equity markets, a downturn in AI‑heavy companies could affect markets worldwide. Some analysts also warn that windfall gains from AI exports might fuel domestic asset bubbles in certain countries.
Uncertainties
While Hernandez stopped short of declaring an AI bubble, other research firms have issued bearish scenarios for 2028, suggesting possible market volatility. The exact timing and magnitude of any correction remain unclear.
