AI could cause global economic downturn, Bank of England chief warns
Bank of England Governor Andrew Bailey has warned that the rapid growth and high valuation of the AI sector could trigger a global economic downturn. He highlighted risks related to market concentration, leverage, and potential cyber security threats to financial systems.
Why it matters
This warning from a top financial regulator signals growing institutional concern that AI-driven market bubbles could destabilize the global economy.
Image source, Reuters By Ruth Comerford Published 26 minutes ago The governor of the Bank of England has warned G20 finance ministers that artificial intelligence could cause a global economic downturn and pose a significant cyber security risk to financial systems.
Andrew Bailey said any collapse of growth in the AI sector could lead to a "future market correction" that spreads worldwide.
Addressing finance ministers in the US on Monday, he said companies around the world should prepare for security breaches "involving simultaneous disruption across multiple firms".
Earlier this month, a group of 100 firms , including Google, Microsoft, Anthropic and OpenAI, urged countries and groups to beef up their cyber defences before AI grows powerful enough to override them.
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