The Bank for International Settlements has a warning for anyone caught up in AI mania: the bill is coming due. The five largest hyperscalers are on track to blow through $1 trillion on AI infrastructure between 2025 and 2026 alone, and that spending is way outpacing actual earnings.
Equity valuations for AI-centric firms are stretched thin. The BIS report, released Sunday, notes that “sustaining such high growth could become increasingly challenging.” That’s diplomatic speak for “this doesn’t end well if the music stops.”
Here’s the real problem. This spending spree hasn’t been funded by profits. It’s been fueled by debt, much of it flowing through highly leveraged nonbank structures that can unwind fast. Nick Ruck of LVRG Research put it bluntly: a bust in the AI capital stack could send shockwaves through an already strained global economy.
The macroeconomic backdrop isn’t helping. US inflation hit a three-year high of 4.2% in May. If central banks tighten further to fight it, AI asset prices could pull back sharply after what the BIS calls a “prolonged period of exuberant risk-taking.” That scenario risks triggering what the report describes as “disruptive macro-financial feedback loops.”
There’s also a phenomenon called “chipflation.” Surging semiconductor and memory chip prices, driven by AI data center demand outstripping supply, are pushing up costs for everything from smartphones to laptops. Consumers end up footing that bill too.
The BIS also flagged stablecoins as a separate risk, warning they could fragment the global monetary system and weaken sovereign monetary control.
Bottom line: the AI boom has been great for headline growth. But the BIS is making clear that the financial vulnerabilities building underneath it are real, and they won’t disappear just because investor optimism stays high.
