Central bank group flags systemic risks from AI capex boom, citing parallels to dot-com and railway bubbles with global spillovers.
The Bank for International Settlements cautioned that a $1 trillion AI investment wave could collapse abruptly, sparking a recession if returns fail to materialize. Household equity exposure has risen sharply, amplifying consumption risks from a potential tech-driven correction beyond U.S. borders.
The warning draws comparisons to the dot-com crash and 19th-century railway manias, noting AI energy and chip demand is already stoking inflation pressures. Despite elevated price risks, the BIS stopped short of endorsing rate hikes, citing policy uncertainty.
Commodity and credit markets face direct exposure through electricity shortages, semiconductor bottlenecks, and leveraged data center construction. Long-term supply contracts tied to AI demand could magnify downside risks if growth projections disappoint.