In its Annual Economic Report, published on Sunday, the Bank for International Settlements (BIS), known as the central bank for central banks, warned that the enormous spending on AI is accumulating financial vulnerabilities that could amplify any future shock and spread from markets into the wider economy.
Presenting the findings, BIS general manager Pablo Hernández de Cos said the message was one of "urgency", with policymakers urged to act before any reversal makes the eventual adjustment more painful.
At the core of the warning is the scale of the spending, despite massive investment having supported global growth over the past year.
The five largest "hyperscalers", the technology giants racing to build AI infrastructure, are on track to commit more than $1 trillion (€878bn) to AI-related investment across 2025 and 2026, a pace that is outstripping their earnings and free cash flow and pushing some to borrow heavily to keep up.
The BIS suggests this race is fuelled by a belief that only a handful of dominant players will ultimately prevail, encouraging firms to pour money into projects whose returns remain deeply uncertain.
