IMF and Bank of England Warn AI Boom Could Trigger Sudden Market Correction

The IMF and the Bank of England have warned that the ongoing AI investment boom could lead to a sudden and painful stock market correction. Valuations of major tech companies are now nearing levels last seen during the dotcom bubble more than two decades ago.

Source Financial Times

IMF chief Kristalina Georgieva said that market optimism about the “productivity-enhancing power of AI” could “turn abruptly,” triggering a global slowdown. The Bank of England echoed this concern, noting that equity markets, particularly those driven by AI-focused companies, appear overstretched.

Experts added that the heavy concentration of investor money in a few tech giants — such as Microsoft, Google, and Meta — means that any downturn in AI sentiment could have a severe ripple effect across global markets.