Warning of the risk of an AI stock bubble

VTV.vn - The Bank of England (BoE) warns of the risk of an AI stock bubble that could lead to a major correction, causing a ripple effect on the UK economy and global markets.

Bank of England (BoE). (Source: AFP/VNA)

The Bank of England (BoE) has just warned of the risk of a bubble in artificial intelligence (AI) stocks, which could trigger a large-scale correction and damage the economy . This is the strongest warning the BoE has issued regarding AI.

According to the Bank of England's Financial Policy Committee, stock valuations in the market are relatively high by many measures, particularly for AI companies. The committee believes there is an increasing risk of a sharp market correction, similar to the "dot-com bubble" period.

This could have a significant impact on the UK economy, which is a major international financial center, and create a "domino effect" spreading to global markets.

However, Jensen Huang, CEO of AI chip manufacturer Nvidia, argues that the current AI stock boom is entirely different from the dot-com bubble. Huang stated that the current growth wave is driven by large, profitable corporations, and spending in this sector is only in its early stages. He emphasized that the size of leading technology companies today has reached approximately $2.5 trillion, compared to just $30-40 billion for internet companies in 2000.

Policymakers are concerned that the capital flowing into these companies may not deliver the expected returns, as the market currently only reflects potential growth prospects.

Meanwhile, the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, also warned that the oversold state of stock prices poses an increasing risk to global financial stability. She argued that current valuations mask many weaknesses in the system, comparing the current situation to the dot-com bubble of the early 2000s – a period that ended with a major stock market crash.

Ms. Georgieva also stated that if a sharp adjustment occurs, tighter financial conditions could drag down global growth, expose weaknesses, and have a particularly severe impact on developing countries.

Source: https://vtv.vn/canh-bao-nguy-co-bong-bong-co-phieu-ai-100251010154612611.htm