The Bank for International Settlements (BIS), the advisory body to the world’s central banks, warned in its annual report published Sunday that the recent surge in spending on artificial intelligence (AI) carries significant risks. The BIS said that disappointing returns on AI investments could prompt a rapid withdrawal of financing, triggering an extended “investment bust” that could threaten the global economy.
The report notes that major technology firms are directing billions of dollars into AI projects, but if those investments fail to deliver adequate returns, investor appetite and funding could contract sharply. According to the BIS, the scale of the current AI boom has already outstripped previous major investment waves, including the spread of railways and the internet.
These cautions reinforce longstanding doubts about the sustainability of AI investment. The warning comes amid recent market turbulence: a major selloff in technology stocks last week, and media reports that OpenAI is considering delaying its initial public offering, in part because of concerns that investors may not be eager for its shares.
The BIS annual report therefore emphasizes the importance of closely monitoring expected returns and financing conditions for AI, given the speed and capital intensity of investment in the sector and the potential implications for financial stability.
