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IMF warns an AI share-price correction could unsettle global markets
The IMF said sky-high valuations and rising debt in AI firms have left risks “elevated,” and warned that an AI correction could have global consequences.
The International Monetary Fund warned that a potential share-price correction in artificial intelligence stocks could spill into broader global financial markets, raising risks to world financial stability, according to its twice-yearly Global Financial Stability Report.
The IMF pointed to high valuations in AI companies and their increasing borrowing to fund investment as reasons risks are elevated, adding that the consequences of an AI correction could be global.
The report also said that beyond the US, Asian markets would be among the most exposed, while the UK and the euro area could be more insulated, though investors with US holdings would still face impacts.
It further flagged concerns including government borrowing and cyber-attacks as additional vulnerabilities for the global economy, warning that it expects global growth could soon test the limits of resilience.