AI debt boom raises financial stability concerns, BIS says

[Abstract circuit board with a lot of micro chips] sankai/E+ via Getty Images Artificial intelligence infrastructure investment is increasingly being financed through long-term debt and complex off-balance-sheet arrangements, raising financial stability concerns as exposures become concentrated among a handful of large companies, the Bank for International Settlements said in a report. The financing of the AI boom has drawn attention as technology companies ramp up spending on data centers and computing capacity. While spillovers into broader bond markets have so far been limited, sustained borrowing at the current pace could put greater pressure on long-term yields and raise borrowing costs beyond the AI sector, the BIS said.