De Cos advierte del riesgo de desplome bursátil por la IA

Former Governor of the Bank of Spain, Pablo Hernández de Cos, has warned of the potential for a stock market crash driven by artificial intelligence (AI) technology. In a speech at the International Banking Conference organized by Santander, de Cos expressed concerns over the sky-high valuations of tech companies. He highlighted that the euphoria surrounding AI-related stocks is "extremely concentrated in a small group of firms" driven by ambitious future income expectations.

De Cos pointed out that these companies are making massive capital investments, which far exceed their current operating cash flows, forcing them to increasingly rely on borrowing and private credit. This debt-heavy financing is also interconnected, making it difficult to observe and value. Unlike previous technology bubbles, de Cos fears that an AI bubble burst could be particularly harmful to individual investors.

He noted that home wealth is now a larger part of overall wealth, and a severe price correction would have a more significant impact on consumer spending. If AI returns disappoint and trigger a market correction or crash, the loss of wealth for households will be felt more severely and rapidly in global consumption compared to past crises where institutional investors cushioned the blow.