LONDON, September 10: The rapid growth of artificial intelligence is creating new risks for global financial stability, according to Bank for International Settlements (BIS) chief Pablo Hernández de Cos, who warned that the scale of AI investment is already large enough to influence global economic conditions.
AI Investment Surges
The BIS estimates the world’s five largest technology companies will invest more than $1 trillion in AI during 2025 and 2026.
Industry forecasts suggest global AI investment could rise from around $500 billion currently to as much as $4 trillion by 2030.
Debt and Valuations Raise Concerns
Hernández de Cos warned that more AI investment is being financed through debt and private credit, with some funding structures remaining opaque and interconnected.
He also highlighted risks from:
- High technology valuations
- Market concentration
- Heavy debt financing
- Returns falling short of investor expectations
These factors could create vulnerabilities if the AI boom loses momentum.
AI Could Boost Productivity but Disrupt Jobs
The BIS chief said AI has genuine potential to improve productivity, with studies showing significant gains in areas such as coding and consulting.
However, early signs of job displacement are appearing in customer service, programming and administrative roles, making retraining increasingly important.
He added that India has a strong opportunity to benefit from AI due to its digital public infrastructure, but policymakers will need to closely monitor financial and labour-market risks.
source – Reuters
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