BIS and Bank of England warn an AI bubble could turn boom to bust

The Bank for International Settlements said the race to build AI infrastructure is on track to surpass previous technological booms that ended in severe market disruptions, cautioning about the debt fueling the buildout. Bank of England Governor Andrew Bailey separately told Parliament that the fallout from an AI stocks bubble bursting would reach the UK economy and could prompt an interest-rate response. The warnings land amid a jittery market where Bank of America flagged a dot-com-style "shock risk" from record divergence between single-stock and index volatility. Big Tech has doubled its combined debt to fund data centers, raising the stakes if AI returns disappoint.

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