Bank of England Warns AI Boom Risks Market Shocks — SkimNews
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- Andrew Bailey, governor of the Bank of England, warned that AI could trigger financial market shocks and said the central bank is watching huge AI investments "very carefully," cautioning "not everybody always wins" and invoking Netscape as a former market leader "nobody can remember"
- Nvidia is currently the world's most valuable listed company with a $5.5tn (£4.14tn) market valuation, driven largely by investor bets on AI profits
- Anthropic and OpenAI are preparing to sell shares on the US stock market in moves widely expected to channel hundreds of billions of dollars more into the AI sector
- Alphabet, Meta, Microsoft, and Amazon are collectively spending hundreds of billions of dollars on AI technology
- Bailey flagged AI-enabled cyber attacks as a major risk, calling the technology "a very powerful, potentially very powerful, weapon" in the wrong hands and noting it uncovers vulnerabilities in existing operating software
- Bailey experienced deepfakes firsthand when fake images depicting him and Nigel Farage in a physical fight were promoted on X in June; he said the Bank has struggled to trace their origin and needs "a lot of help from the tech sector"
- UK 30-year bond yields rose above 6% on Thursday — their highest since 1998 — while US 10-year yields hit 5.34%, their highest since 2002, amid the same investor pivot into AI that Bailey was warning about
Why it matters: BoE Governor Bailey is explicitly preparing the financial system for correction shocks as Nvidia sits at $5.5tn, Anthropic and OpenAI prepare listings worth hundreds of billions more, and UK and US bond yields already hit multi-decade highs. A sudden AI revaluation would land on an already-stressed global bond market.
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