The Bank for International Settlements (BIS) warned in its annual economic report that debt-fueled AI spending could trigger a global financial bust.
The five largest technology hyperscalers plan to invest over $1 trillion in AI projects during 2025 and 2026. This investment pace currently exceeds their earnings and requires heavy borrowing.
The BIS cautioned that AI exuberance creates financial vulnerabilities that may amplify future economic shocks. Opaque circular financing deals between chipmakers, cloud providers, and AI labs could conceal systemic risks. These complex arrangements may accelerate a market crash faster than a traditional banking crisis.