AI ‘exuberance’ risks ending in lengthy investment bust, BIS warns

The Bank for International Settlements warns that AI exuberance risks ending in a lengthy investment bust. Weak returns could trigger a sharp pullback in funding for tech companies, potentially threatening the global economy. This investment surge risks financial instability, which may lead to market corrections and increased regulatory scrutiny if expected returns falter. The BIS emphasizes that the current boom in AI funding could create significant systemic risks if the technology fails to deliver promised economic gains.