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Bank of England warns AI investment could spark market shocks
Governor Andrew Bailey said the central bank is monitoring large AI capital inflows, and noted that “not everybody always wins.”
Bank of England Governor Andrew Bailey warned that the UK needs to be prepared for potential financial market shocks tied to rapid AI investment. Speaking exclusively to the BBC, Bailey said the central bank is watching the large amounts of money going into artificial intelligence “very carefully.”
Bailey cautioned that while AI has “great potential to strengthen growth,” investors may have pushed some AI firms toward multi-trillion dollar market valuations that carry risk. He also said the last few years of spending and lending to AI companies have contributed to markets valuing parts of the sector at very high levels.
The BBC cited Nvidia as an example, saying the chipmaker is currently the world’s most valuable listed company with a market valuation of $5.5 trillion, largely tied to investor expectations for big AI profits. The report also pointed to major tech companies including Alphabet, Meta, Microsoft, and Amazon, saying they are spending hundreds of billions of dollars on AI technology.