BIS Warns of Financial Risks from AI Investment Boom

The Bank for International Settlements (BIS) has warned that the current boom in AI investment is raising debt levels and dependence on private credit, which could lead to widespread shock across financial markets if expected returns fail to materialize. In a speech released on October 10, the BIS projected that capital expenditures by five major tech firms for AI-related projects in 2025-2026 will exceed $1 trillion (approximately KRW 1,343 trillion). The BIS also cited industry forecasts predicting global AI investment will grow from around $50 billion (approximately KRW 67.15 trillion) today to between $3 trillion and $4 trillion (approximately KRW 4,029 trillion to KRW 5,372 trillion) by 2030. The BIS noted that AI companies' capital expenditures are outpacing cash flows, increasing debt and reliance on private credit. If AI returns fall short of expectations, investment could rapidly contract, worsening credit conditions and triggering broader financial market disruptions.