AI boom could trigger market shocks, Bank of England boss warns
Andrew Bailey says the central bank is watching the waves of cash being invested in artificial intelligence "very carefully".
The Bank of England's governor has cautioned that the rapid expansion of artificial intelligence (AI) could trigger financial market shocks and advised the UK to be prepared for these risks. Andrew Bailey pointed out that the substantial investments flowing into AI companies have led to valuations of some firms as multi-trillion dollar businesses, causing markets to become highly sensitive.
Speaking to the BBC, Bailey noted that AI presents significant growth potential for economies, but also highlights the substantial risks associated with it. He expressed concern over asset price corrections if AI investments fail to yield expected returns, citing the potential for such a correction in the future. The Bank of England remains vigilant about the risks posed by AI, including the potential for cyber attacks facilitated by the technology and the creation of deepfakes to mislead the public.
Despite these risks, Bailey recognizes the potential benefits of AI in streamlining the work of the Monetary Policy Committee, which sets interest rates.
Written by urgent.news from BBC Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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