The threat of an AI share price crash rippling out across global markets is putting world financial stability at risk, the International Monetary fund has warned.
In its twice-yearly Global Financial Stability Report, the IMF highlighted the sky-high valuations for AI companies along with their increasing debt pile as one reason that risks in the system are “elevated”.
“The consequences of an AI correction could be global,” it warned. Aside from the US, Asian markets would be most exposed, and the UK and euro area potentially more insulated – though investors with US holdings would be hit.
Athanasios Vamvakidis, the deputy director of the IMF’s monetary and capital department, launching the report, said “the exposure of the rest of the world to US assets, particularly AI, is the highest it has ever been. So this is supporting the global economy through wealth effects…
