Bank Of England Flags Sharper AI Share Correction Risks Arabian Post

(MENAFN- The Arabian Post) clearfix"> The Bank of England has warned that elevated artificial intelligence share valuations could trigger a sharper market correction, potentially spreading losses across financial markets as borrowing to fund the technology's expansion accelerates.

The central bank's Financial Policy Committee said investors remained vulnerable to disappointment over AI earnings, adoption and infrastructure spending. Its September assessment, published on 30 September, identified growing links between technology shares, debt markets and leveraged investment strategies that could magnify any sell-off.

The warning has acquired greater significance following renewed volatility in technology stocks. A sharp Wall Street decline last week highlighted investor concerns about the financing and profitability of data centres, while lenders have become more selective about funding projects dependent on sustained demand for computing capacity.

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