Bank of England Governor Warns AI Boom Could Trigger Financial Market Shock

Bank of England Governor Andrew Bailey warned that Britain needs to prepare for potential financial market shocks from a valuation correction after the artificial intelligence boom.

In an interview aired on Oct. 1, Bailey said a flood of money into the AI sector has pushed up asset prices and that the central bank is watching "very, very closely." "The market is pricing as if everyone is going to be a winner. Looking at history, not everyone ends up being a winner," he said. The Bank of England is ready to respond to market shocks and ensure the resilience of the financial system.

His comments come as global debate intensifies over whether the AI boom can be sustained. Trillions of dollars in new wealth are built on expectations that AI will maintain rapid growth. But intense competition among AI companies, higher financing costs and growing public opposition to data centres have fueled market concerns.

The Bank of England's semi-annual systemic risk survey, released on Sept. 30, showed a record number of respondents citing AI-related risks. Bailey said AI has become a powerful tool for exposing system vulnerabilities and could become a "very powerful weapon" if it falls into malicious hands.

Recent major safety incidents, including OpenAI's disclosure last week that its model had hacked an Australian government website, have intensified calls to slow frontier AI development. Anthropic CEO Dario Amodei has pledged to slow down the most advanced model development, with OpenAI CEO Sam Altman, Elon Musk and others expressing support. Trump, however, dismissed such doomsday warnings as a "scam" and rejected proposals for more international coordination on AI, calling them a "globalist conspiracy." Amodei and Trump had dinner together on the evening of Sept. 27.