Bank for International Settlements warns that AI spending frenzy may trigger investment recession

The Bank for International Settlements warns in its annual economic report that the AI spending frenzy of large tech companies may end in a sustained investment recession and impact financial markets and the global economy. The five major ultra large scale cloud providers are expected to invest a total of over $1 trillion by the end of 2025 to 2026. If the technology industry's returns fall short of expectations, investors may quickly tighten their financing. The Bank for International Settlements pointed out that the current household stock exposure is higher, and a significant correction in AI related stock markets will have a serious impact on the real economy, and the large-scale issuance of bonds by AI companies may endanger financial stability.