Bank of England chief warns that inflated AI valuations and rising leverage could trigger the next financial crisis

Andrew Bailey, the Governor of the Bank of England, warned G20 finance ministers about the risks of inflated AI valuations. He noted that cross-investments between AI firms and hyperscalers could lead to a chain reaction if a major player falters. Bailey emphasized that many countries still lack the necessary regulations for advanced AI, increasing cyber risks associated with cutting-edge models. These risks could potentially trigger a new financial crisis if not addressed appropriately.