Overview
- The BIS published its Annual Economic Report on June 28, 2026, and identified the rapid AI build-out as a systemic pressure point that could end in an abrupt bust if returns disappoint.
- Reporting shows the five largest hyperscalers are on track to spend more than $1 trillion on AI-related capital expenditure across 2025 and 2026, shifting large parts of the sector from internal funding to debt.
- The BIS flagged a rise in financing through non-bank channels such as hedge funds, private credit and special-purpose vehicles that create regulatory blind spots and faster contagion risk.
- Rising demand for chips, electricity and data centres is already lifting input costs, which could entrench inflation and make central banks’ decisions on interest rates harder to manage.
- The bank urged urgent action on macroprudential rules, fiscal sustainability and broader oversight beyond banks because a sharp correction could hit household wealth, strain credit in supply chains, and worsen job displacement risks.