Overview

• The IMF cautions that AI-fueled asset prices look stretched and a market shock could threaten bank capital, with 10% of U.S. banks and 30% of European banks flagged as vulnerable.
• The Bank of England and Deutsche Bank highlight the risk of a sharp correction tied to AI enthusiasm, with earlier volatility underscored by a one-day 17% drop in Nvidia shares after the Deepseek episode.
• Goldman Sachs contends current AI spending remains early and sustainable, estimating roughly $20 trillion in long-run U.S. GDP gains and a 15% productivity lift, with U.S. AI investment near $300 billion a year and still under 1% of GDP.
• Massive build-outs point to heavy power needs, including a planned Nvidia–OpenAI data-center effort projected at about 10 gigawatts and a Meta facility targeting roughly 2 gigawatts.
• Market gains remain concentrated in a few leaders such as Nvidia ($4.3 trillion), Alphabet ($2.97 trillion) and TSMC ($1.24 trillion), while private valuations like OpenAI’s reported $500 billion contrast with ongoing losses and profitability not expected until around 2029.