The Bank for International Settlements said that the current global investment competition around artificial intelligence infrastructure is developing in the direction of surpassing previous technological boom cycles, and those booms eventually all ended in severe market turmoil. A research report released by the Basel-based Bank for International Settlements on Tuesday warns that if productivity growth ultimately fails to justify these huge investments, then increasing debt financing and financial links between hyperscale cloud service providers and AI developers will increase the risk of wider financial turmoil. Bank for International Settlements economist Phurichai Rungcharoenkitkul wrote in the report: “The more capacity this industry builds, the higher the productivity threshold it must cross to maintain prosperity. As a result, larger prosperity is not only more likely to disappoint, but once disappointing, it can also cause more damage.”

The Bank for International Settlements said that the current global investment competition around artificial intelligence infrastructure is developing in the direction of surpassing previous technological boom cycles, and those booms eventually all ended in severe market turmoil. A research report released by the Basel-based Bank for International Settlements on Tuesday warns that if productivity growth ultimately fails to justify these huge investments, then increasing debt financing and financial links between hyperscale cloud service providers and AI developers will increase the risk of wider financial turmoil. Bank for International Settlements economist Phurichai Rungcharoenkitkul wrote in the report: “The more capacity this industry builds, the higher the productivity threshold it must cross to maintain prosperity. As a result, larger prosperity is not only more likely to disappoint, but once disappointing, it can also cause more damage.”