BIS chief warns opaque debt fuels AI capex arms race risk

Jacques de la Tour, the chief of the Bank for International Settlements (BIS), warned that the current global competition in artificial intelligence is driven by opaque debt rather than proven profits. He stated that corporations are engaging in an arms race where they borrow heavily to fund technology development without sufficient revenue generation. De la Tour compared this behavior to historical asset bubbles, specifically citing the railway era and the dot-com boom. He argued that relying on hype instead of actual earnings creates fragility within the financial system. The BIS chief emphasized that this model could lead to a broad economic correction if funding becomes unsustainable. No specific companies were named in the report regarding these borrowing levels or capex amounts.