AI boom risks global financial crash, warn central bankers

- Central bankers (the people who run institutions like the US Federal Reserve, the Bank of England, and the European Central Bank) are warning that the rapid rise of AI could trigger a financial crisis. They are concerned that a small number of powerful tech companies are spending huge sums on AI infrastructure, funded largely by debt and a frenzy of investor speculation (similar to the dot-com bubble of the late 1990s). - The worry is that if AI fails to deliver the expected profits quickly enough, those investments will collapse in value, potentially causing a wave of defaults and bank losses that could spread through the global financial system — much like the 2008 crash did after subprime mortgages blew up. - This matters because central bankers are the guardians of financial stability. Their warnings signal that this risk is being taken seriously at the highest levels of economic policy, even as the tech industry itself insists the AI revolution is justified.