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The Bank for International Settlements has warned that the current AI investment boom mirrors earlier technological revolutions — canals, railroads, the internet — that attracted more capital than near-term returns justified and ended in economy-wide recessions.
The BIS, described as the "central bank for central banks," flagged the AI cycle as a potential source of financial system stress at a moment when the global expansion is unusually dependent on a single investment theme.
The BIS Finding: Precedent and Downside Risk The BIS drew a direct line between today's AI buildout and prior infrastructure booms.
"These episodes ended with an eventual reversal in investment, inducing economy-wide recessions," the institution wrote in its report.
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