AI Investment Boom Fueled by Debt Sparks Financial Stability Concerns
The Bank of England's Financial Policy Committee (FPC) has warned that the rapid growth in AI investment, largely financed by debt and private credit, poses significant financial stability risks. The FPC noted that AI-related financing had continued to grow rapidly and was expected to remain on a strong upward trajectory.
According to the latest meeting record, global AI-related debt issuance was estimated at around USD 450 billion as of early September. This is more than double the total issuance recorded during all of 2025, according to Morgan Stanley estimates. The FPC also cited estimates from JP Morgan analysts that AI-related capital expenditure financed through debt issuance could reach around USD 4.1 trillion between 2026 and 2030.
The committee highlighted risks linked to the combination of increasing leverage, limited transparency, and 'circular arrangements' in AI-related financing. These factors could make it harder to assess risks and increase losses if expectations around AI investment fail to materialise.