BIS Chief Warns AI Investment Boom Built on Opaque Debt Could Trigger Crisis

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Bank for International Settlements head Pablo Hernandez has raised alarms about the rapid surge in artificial intelligence capital expenditure. He cautioned that much of this spending is being financed through opaque debt rather than grounded in actual profits. Hernandez drew parallels to historical speculative bubbles, including the 19th-century railway boom and the early 2000s dot-com crash. He warned that hype-driven investment cycles of this nature have historically led to broad economic corrections. The remarks highlight growing concern among global financial regulators about systemic risks embedded in the AI spending race.

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