Artificial intelligence investment is growing fast and could cause shocks in financial markets and the UK Bank of England Gov. must ensure its financial system is resilient Andrew Bailey cautioned.
Bailey told the BBC the central bank was watching the huge amounts of money going into AI “very carefully” and warned that “not everybody always wins.”
Asked whether an AI bubble could burst, Bailey said: “You could see some correction of asset prices at some point.”
He said AI had “great potential to strengthen growth in our economies” but also had “substantial risks.” Many companies are priced by investors as winners, so any disappointment about future earnings or productivity gains could lead to a sharp reassessment of valuations.
“Everybody is currently priced to be a winner,” Bailey said, adding that history showed “not everybody is a winner.”
The risk of a sharper correction in AI-related assets remains, especially if expectations for earnings and adoption weaken, according to The Bank of England’s Financial Policy Committee. It also said global debt issuance related to AI had reached about $450 billion early in September, more than double the tally for 2025.
“We have to make sure the system is resilient,” said Bailey.
