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The IMF warns that a fall in AI stocks puts global financial stability at risk
IA en un minuto newsroom · Editor: Jon Elgezabal
In 30 seconds
The IMF ranks a slump in AI shares among the three biggest threats to world finances, next to costlier government debt and cyberattacks. According to its figures, 14 deals closed since 2023 involve, in dollars, about 300 billion put in as equity and another 650 billion lent within the sector. Outside the United States, Asia would be the area hit hardest if prices correct.
The International Monetary Fund (IMF) places a fall in AI-linked stocks among the three key risks to global financial stability. The warning appears in the October edition of its Global Financial Stability Report, whose first chapter comes out this Tuesday, October 13, during the annual meetings of the IMF and the World Bank in Bangkok. The other two risks are a sharp rise in government bond yields and cyberattacks.
According to the report, as quoted by The Guardian, the organization warns that "the consequences of an AI correction could be global". Outside the United States, markets in Asia would be the most exposed, while the United Kingdom and the euro area would probably be more sheltered, the newspaper adds.
The IMF does not treat a fall as a given. According to the same newspaper, it describes the three risks as "plausible near-term catalysts" for a sudden tightening of financial conditions and for turbulence in markets.
The Fund points to the very high valuations of AI companies, their growing debt and so-called "circular financing", in which equity and debt move back and forth between companies in the same sector. In a post on its blog, dated Monday, October 12, it explains that it reviewed 14 deals of this kind made since 2023: together they add up to about 300 billion dollars in equity investments and 650 billion in debt, in exchange for future revenue commitments worth 1.4 trillion. It adds that hyperscalers, the companies putting up the infrastructure for AI, are borrowing more and more, and that some investors rely on leverage to buy shares in the sector.
Among its recommendations to authorities, the IMF asks them to steer public debt onto a sustainable course, to put limits on leverage and on liquidity mismatches in AI, in private credit and in the rest of non-bank finance, and to improve defenses against cyberattacks, for example through better incident reporting.
Why it matters · analysis and opinion
A warning that comes from the IMF changes the tone of the discussion about AI valuations: it is no longer an analyst view but a risk listed next to public debt and cyberattacks. What matters is the mechanism it describes. When suppliers, customers and investors in the same sector finance one another, the revenue promised by some props up the debt of others, and a stumble in profitability can spread along the whole chain. For a company that buys AI services, the practical reading is about dependence: it is worth knowing which provider sits behind each tool, what would happen to the service and to prices if that provider had to cut back, and avoiding contracts that tie everything to a single platform. The Fund does not take a fall for granted; it asks supervisors to limit leverage before one arrives.
Official source: IMF · Written with the help of AI: how we make the news
