Bank for International Settlements chief Pablo Hernandez warned that the race to fund artificial intelligence capital spending is relying on opaque debt and could pose systemic risks to the broader financial system. He drew comparisons with earlier railway and dot-com bubbles, pointing to periods when heavy investment ran ahead of underlying profits. His caution centers on the idea that spending driven by hype rather than actual earnings can leave the wider economy exposed to a sharper correction. The remarks, reported by CoinDesk, frame AI financing not simply as a technology story but as a potential source of broader economic vulnerability if leverage and funding structures remain unclear.
Bank for International Settlements chief Pablo Hernandez warned that the AI capital expenditure race is being financed with opaque debt, and he said that setup could spark systemic risks.
He pointed to the railway and dot-com bubbles as earlier versions of the same problem, warning that when spending runs on hype rather than real profits, the fallout can spread into a wider economic correction.
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