AI boom could trigger market shocks, Bank of England boss warns
Bank of England Governor Andrew Bailey has warned that the massive capital influx into artificial intelligence could lead to market shocks if expectations for growth are not met. While acknowledging AI's economic potential, he cautioned that the central bank is monitoring the sector for signs of a bubble.
Why it matters
The warning underscores the systemic financial risks associated with the current high-valuation AI investment boom.
Image source, Bloomberg via Getty Images By Mitchell Labiak , Business reporter and Faisal Islam , Economics editor Published 12 minutes ago Artificial intelligence (AI) could trigger financial market shocks and the UK needs to be prepared for them, the governor of the Bank of England has warned.
Andrew Bailey said the central bank is watching the huge amounts of money being invested in AI "very carefully" and cautioned that "not everybody always wins".
The money that has been spent on and loaned to AI firms over the last few years in the hope of large returns is causing markets to value some of them as multi-trillion dollar businesses.
Asked if he believed an AI bubble could burst, Bailey said: "You could see some correction of asset prices at some point."
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