AI boom could trigger market shocks, Bank of England boss warns
Artificial intelligence (AI) could trigger financial market shocks and the UK needs to be prepared for them, the governor of the Bank of England has warned. Andrew Bailey said the central bank is watching the huge amounts of money being invested in AI “very carefully” and cautioned that “not everybody always wins”. The money that […] The post AI boom could trigger market shocks, Bank of England…
The Bank of England's governor, Andrew Bailey, has cautioned that the rapid growth and investment in artificial intelligence (AI) could potentially cause financial market shocks in the UK. Bailey highlighted that the central bank is paying close attention to the substantial amount of money being invested in AI firms, as these investments have led to the valuation of some companies as multi-trillion dollar businesses.
Despite acknowledging the technology's potential to boost economic growth, Bailey emphasized that there are significant risks associated with the sector. One such risk is the possibility of a correction in asset prices if the high expectations for AI's profitability are not met, as many investors are currently expecting big returns.
The governor also warned about the dangers of AI being used in cyber attacks and deepfakes, both of which can be exploited for malicious purposes. Despite these risks, Bailey sees AI as a valuable tool for the Monetary Policy Committee's work in setting interest rates. He believes that AI provides an important advantage in speeding up the process.
Written by urgent.news from KBC's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
