Bank of England Sounds Alarm on AI-Related Debt Threat

The Bank of England has warned that rapid growth in AI-related debt and recent security concerns are posing a risk to UK financial markets' stability.

Rapid increases in AI-related debt, combined with recent security concerns around the technology, have raised fears about the potential impact on interconnected financial stability. Global debt issuance for AI-related investment is expected to exceed that of countries such as the UK in 2026, with JPMorgan estimating that around $450 billion of debt has already been supplied this year.

The central bank noted that sterling-denominated AI debt accounts for 47% of GBP corporate bond issuance this year. Private credit markets are expected to play an increasingly important role in funding AI developments, but their rapid growth and opaque nature pose a threat to global financial stability.