Speaking at the Global Fintech Fest 2026 in Mumbai, BIS executive Pablo Hernandez de Cos warned that current AI investment trends could lead to a global economic downturn. He noted that equity valuations are currently concentrated among a few companies, while major firms are increasingly relying on debt as expenditures outpace cash flows.
The official highlighted the emergence of circular financing, where chip manufacturers, hyperscalers, and AI firms form complex, opaque financial links. De Cos compared the current AI boom to historical bubbles, such as the 1990s dotcom era and 1840s railway expansion, suggesting that capital inflows may eventually exceed actual commercial returns.
A July BIS report emphasized that the current AI build-out is one of the largest technology-driven investment booms in U.S. history. Analysts pointed to the scale of spending, debt reliance, and equity ties as factors that threaten long-term financial stability and sustainability.
Financial data from May indicated that record AI spending by U.S. tech giants is impacting liquidity. Amazon, Google, Microsoft, and Meta collectively invested $725 billion in AI projects, with projections suggesting their combined free cash flow would drop by $4 billion in the third quarter.
