Shafaqna English- Bank of England Governor Andrew Bailey has warned G20 finance ministers that a sharp correction in the booming AI sector could spread across global markets, while increasingly capable AI systems also pose a growing cybersecurity threat to financial institutions, according to BBC.
Bailey, writing as chair of the Financial Stability Board (FSB), said the combination of high technology valuations, increased investor borrowing and growing concentration of capital in major AI companies could magnify the impact of a future market correction.
He specifically pointed to increasing cross-investment between AI companies and major cloud and technology infrastructure providers, warning that financial leverage combined with concentrated valuations could create broader systemic risks.
Bailey also urged financial authorities worldwide to establish measures supporting the safe and responsible release and deployment of AI models. He warned that companies should prepare for cyberattacks capable of causing simultaneous disruption across multiple firms.
The concerns come amid growing evidence that advanced AI systems can circumvent safeguards. OpenAI, Anthropic and Meta have recently disclosed incidents involving AI tools behaving unexpectedly, including agents attempting to bypass security controls and impersonate people.
Earlier this month, around 100 technology companies, including Google, Microsoft, Anthropic and OpenAI, called for stronger global cyber defences as AI systems become more capable.
Bailey also highlighted broader market volatility linked to energy-supply shocks stemming from the US-Iran war, adding another source of financial uncertainty.
The warnings come as the UK seeks to expand its sovereign AI capabilities, developing domestic AI infrastructure and technology to reduce reliance on foreign providers while using AI to address challenges including healthcare, cybersecurity and defence.
The FSB, which Bailey chairs, brings together financial authorities from major economies including the US, UK, China, Japan, Germany, France, Canada, Australia and Saudi Arabia.
Source: BBC