The Bank of England warned that the trillion-dollar spending boom in the field of artificial intelligence infrastructure, supported by debt financing, is at risk of collapse when the stock market is “seriously overvalued.” The Bank of England said on Tuesday that the AI stock correction will affect the wider debt market, and indicated that credit default swaps for companies that rely on debt to finance their investments have shown early warning signs. Although current investment in AI is mainly driven by cash held by “hyperscale enterprises,” the Bank of England says that about half of the estimated $5 trillion in artificial intelligence spending over the next five years will be realized through external financing.

The Bank of England warned that the trillion-dollar spending boom in the field of artificial intelligence infrastructure, supported by debt financing, is at risk of collapse when the stock market is “seriously overvalued.” The Bank of England said on Tuesday that the AI stock correction will affect the wider debt market, and indicated that credit default swaps for companies that rely on debt to finance their investments have shown early warning signs. Although current investment in AI is mainly driven by cash held by “hyperscale enterprises,” the Bank of England says that about half of the estimated $5 trillion in artificial intelligence spending over the next five years will be realized through external financing.