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Andrew Bailey warns AI volatility could trigger a global correction
In a letter to G20 finance ministers, Bank of England governor Andrew Bailey cited highly priced markets and investor borrowing, plus energy shock effects from the US-Iran war, as factors that could amplify downturn risks.
The governor of the Bank of England, Andrew Bailey, has warned G20 finance ministers that artificial intelligence could contribute to a global economic downturn, citing both market volatility and cyber security risks to financial systems, according to BBC Business.
In an open letter to finance ministers in the US, Bailey said growth in the AI sector could collapse and lead to a “future market correction” that spreads worldwide, with companies needing to prepare for security breaches involving simultaneous disruption across multiple firms.
Bailey pointed to conditions he said could intensify any correction, including highly valued stock markets, increased investor borrowing, and money concentrating in a small group of major technology companies, along with cross investment links between AI firms and large cloud providers.
He also linked the heightened volatility to energy supply shock effects attributed to the US-Iran war, and said financial authorities should develop steps to support safe and responsible model release and deployment on a global basis.