Bailey warns AI valuations and leverage could trigger global crisis

Bank of England Governor Andrew Bailey has issued a stark warning to G20 finance ministers that inflated valuations in the artificial intelligence sector, combined with rising investor leverage, could trigger a global financial crisis. In a letter sent ahead of the G20 meeting in North Carolina, Bailey, who also chairs the Financial Stability Board, outlined how a potential correction in AI-related assets could spill over into broader markets and the wider economy. Bailey's central concern is the interaction between high valuations, heavy borrowing, and market concentration.