IMF warns of AI crash risk: tech stock correction could rattle markets
In its financial stability report, the Fund names a correction in AI stocks as one of three acute risks – alongside rising sovereign bond yields and cyberattacks that AI is making more dangerous.
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The International Monetary Fund (IMF) sees the AI boom as a growing risk to the global financial system. "Weaker or less durable AI investments and profitability could be a shock that triggers a market correction," the Global Financial Stability Report said. It was released on Tuesday at the IMF and World Bank annual meetings in Bangkok.
Besides an AI-driven correction, the Fund lists another sharp rise in sovereign bond yields and cyber threats as salient risks. These are "plausible near-term catalysts for a sharp tightening of financial conditions," it said. The risk of successful cyberattacks on critical financial institutions is getting worse as AI improves.
According to The Guardian, the seven largest US tech stocks now make up more than 35% of the S&P 500, up from 12% a decade ago. Global exposure to US assets, and to AI in particular, "is the highest it has ever been," said Athanasios Vamvakidis, a deputy director at the IMF.