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IMF warns AI investment correction could amplify global financial risks
The IMF also flagged rising sovereign bond yields, increased cyberattacks, and leverage tied to AI as concerns in its latest Global Financial Stability Report.
The International Monetary Fund warned that a potential correction in AI-related investments could threaten global financial stability, even as markets have shown resilience, according to Reuters, citing the IMF's latest Global Financial Stability Report.
The IMF said higher sovereign bond yields and cyberattacks could amplify existing market vulnerabilities and create systemic risks, while cautioning investors against complacency.
The fund noted that while AI investment has helped offset economic pressures linked to the war in the Middle East and broader policy uncertainty, evidence suggests AI development may require less capital than anticipated and benefits may not meet expectations.
IMF officials said an AI market correction could weigh on the real economy by reducing wealth and investment, and they highlighted leverage in AI-related investments as a specific concern, with hyperscalers accounting for 10% of global investment-grade bond issuance, Reuters reported.