Andrew Bailey has warned G20 finance ministers that AI could trigger a global economic downturn and increase cyber security threats to financial systems.
Key facts
- •Andrew Bailey warned that AI sector growth could lead to a future global market correction.
- •The Financial Stability Board chairman cited high valuations and investor leverage as factors that could amplify economic instability.
- •A group of 100 firms, including Google and OpenAI, has urged countries to improve cyber defenses against AI threats.
- •The UK government established a £100m fund to support domestic AI start-ups.
- •A new UK government-backed AI economics institute is studying the technology's impact on global economies.
Bank of England Governor Andrew Bailey has cautioned G20 finance ministers that the artificial intelligence sector poses risks to global economic stability. Writing as chairman of the Financial Stability Board, Bailey warned that a collapse in AI growth could trigger a worldwide market correction, exacerbated by high stock valuations and investor leverage.
By the numbers
Economic and Security Risks
Bailey highlighted that the concentration of capital in a small number of major technology firms, combined with cross-investment between AI companies and hyper-scalers, could amplify market volatility. He urged financial authorities to implement measures ensuring the safe and responsible deployment of AI models globally. Beyond economic concerns, Bailey warned of potential cyber security breaches involving simultaneous disruptions across multiple firms. This follows a recent call from 100 companies, including Google, Microsoft, Anthropic, and OpenAI, for nations to strengthen cyber defenses against increasingly powerful AI models.
UK Government Initiatives
The UK government is pursuing a strategy to develop "sovereign AI" to reduce reliance on foreign services. Chancellor John Healey recently announced a £100m fund to support British AI start-ups, with a focus on applications for the NHS and national defense. Additionally, the UK has launched an AI economics institute to collaborate with international partners. The body aims to help policymakers understand the impact of AI on productivity, jobs, and public services.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by BBC Technology.
