Bank of International Settlements Warns That AI Crash Could Produce Investment Drought, Economic Contraction and Even a Crisis | naked capitalism

Big Tech’s AI spending spree risks ending in a prolonged “investment bust” that could rattle financial markets and damage the global economy, the Bank for International Settlements has warned.

The Basel-based organisation, which advises the world’s central banks, said the prospect of worse than expected returns in the tech sector could prompt investors to rapidly curb financing for AI companies, at a time when the five biggest “hyperscalers” are expected to invest more than $1tn from 2025 to the end of 2026.