Bank of England chief warns AI could jolt markets
Andrew Bailey says the UK should prepare for asset-price corrections as AI spending and valuations keep rising.
Bank of England governor Andrew Bailey warned that the AI boom could jolt financial markets and said the UK needs to prepare for possible asset-price corrections. He argued that AI should first face rigorous testing for vulnerabilities, not immediate regulation, because unexpected model failures are part of why such testing is needed. Bailey also flagged security risks from AI-enabled cyberattacks and deepfakes, and said the technology could still help speed up work supporting interest-rate decisions. His comments came as AI-related spending and valuations surged, with Nvidia valued at $5.5tn and firms like Alphabet, Meta, Microsoft and Amazon pouring in hundreds of billions of dollars.
Why it matters
The warning ties AI risk to market stability, not just to software safety. If asset prices reverse sharply, the impact would reach investors and firms exposed to the AI trade, while Bailey’s call for testing before regulation points to a slower, more cautious response than many would expect. His comments also show that central bankers see both the operational and security sides of AI as part of the same risk picture.
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Sources
- BBC Technology