Bank of England Warns AI Debt Surge Could Trigger Financial Market Crisis

The Bank of England has issued a warning about the rapid growth of artificial intelligence investments and the rising global debt, which could trigger a sharp financial market correction.

According to Morgan Stanley estimates, global AI-related debt issuance reached approximately $450 billion by early September 2026, double the amount recorded in 2025.

The central bank is concerned that the structure of financing arrangements for AI investments can make it difficult to determine where financial risks ultimately lie. Additionally, expectations surrounding AI profitability and productivity could prove overly optimistic, leading to a sharp decline in technology stocks and other AI-related financial assets if companies fail to generate anticipated returns.

The Bank of England pointed to the July 2026 technology sell-off as an example of how financial vulnerabilities could emerge, with several heavily exposed investors suffering substantial losses during the market correction. The central bank warned that a larger decline in expected AI earnings could produce more serious consequences, particularly given the existing pressure on global financial markets due to geopolitical tensions and higher energy prices.