AI Boom Poses New Financial Stability Risks, BIS Head Says
The head of the Bank for International Settlements stated that rapid growth in artificial intelligence is increasing global financial stability risks through opaque financing methods such as debt and private credit.
Bank for International Settlements head Pablo Hernandez de Cos emphasized that the rapid rise of artificial intelligence creates new risks for global financial stability, noting that massive infrastructure investments and high market valuations must be closely monitored.
Infrastructure Investments and Economic Impacts
It was stated that infrastructure spending on artificial intelligence has reached a scale that will impact global economic conditions. While artificial intelligence does not change monetary policy for central banks, it simultaneously affects demand, supply, and financial markets, making economies harder to interpret.
Trillion-Dollar Investment Projections
According to Bank for International Settlements estimates, the world's five largest technology companies will invest more than one trillion dollars in artificial intelligence between 2025 and 2026. Industry projections indicate that global artificial intelligence investments could rise from the current level of 500 billion dollars to 4 trillion dollars by 2030.
Opaque Financing and Borrowing
It was noted that the artificial intelligence boom is being financed through debt and private credit rather than corporate profits. The fact that a large portion of the funding remains opaque and interconnected is among the sensitivities requiring close scrutiny.
Historical Parallels and Potential Vulnerabilities
Should corporate profits fall short of expectations, high valuations, market concentration, and opaque financing structures could create potential vulnerabilities. This situation bears similarities to past economic booms such as the railway expansion era and the dot-com wave.
Productivity Gains and Job Losses
Generative artificial intelligence has been observed to provide productivity gains ranging from 10 percent to 65 percent in certain tasks such as coding, consulting, and writing. Conversely, signals of job losses emerge in customer service, programming, and administrative roles as it replaces routine cognitive tasks.