AI Bubble Bursts: Bank of England Warns of Global Economic Downturn
The governor of the Bank of England, Andrew Bailey, has warned that artificial intelligence could trigger a global economic downturn if the AI bubble bursts. In a letter to G20 finance ministers, Bailey highlighted the potential for a 'future market correction' to spread across borders.
Bailey cited the increasing cross-investment between AI companies and hyper scalers as a major concern. He noted that this trend could amplify a future market correction and potentially trigger multiple vulnerabilities if a large shock or combination of shocks occurs.
The warning comes as the UK government announces a £100 million fund to support British AI start-ups. The fund aims to help companies compete for funding to tackle challenges such as cutting waiting lists in the NHS and improving patient care.