The central bank umbrella group said investors are increasingly cautious about AI profitability as tech leverage and opaque financing deals grow.
The Bank for International Settlements warned that the AI-linked rally that lifted global stock markets over the past two years is showing growing signs of vulnerability.
The BIS said investors were becoming increasingly cautious about the profitability of future AI investments as leverage among major US technology firms continued to rise. Its head of economic analysis, Frank Smets, said AI momentum had helped support equity markets and the global economy but was now facing greater risks.
The warning came as AI-linked stocks fell sharply after several leading AI executives called for a slower pace of development to prevent threats to humanity. The BIS also pointed to strains on public finances, geopolitical tensions, volatile energy prices, and rising government bond yields.
Smets said the hundreds of billions of dollars in debt issued by AI firms could be adding to borrowing costs. He warned that financing arrangements were often opaque, off balance sheet, and circular, increasing concerns about rapid growth in debt and leverage.
The BIS said markets showed no overall signs of stress and investor risk appetite remained resilient. However, it said that resilience could prove difficult to sustain if upward pressure on yields continued.
The report found that technology companies’ aggregate borrowing rose from about $22 billion, or 22% of private credit, in 2010 to more than $1 trillion, or 44%, in 2025. The BIS also said increasingly complex central bank messaging could make it harder to communicate inflation developments to the public.
