Kansas City Federal Reserve President Jeff Schmid raised a warning that the artificial‑intelligence boom might be evolving into a "too big to fail" problem for the broader economy. Speaking at a recent event, Schmid said the sheer size of AI‑related financing now merits macro‑level scrutiny.
The Fed official highlighted that Big Tech firms have pledged nearly $2.4 trillion to AI projects, a sum that dwarfs previous corporate investment cycles. That level of spending, he noted, leaves little room for error if demand falters.
Schmid’s concern centers on both scale and interconnectedness. He pointed out that many AI initiatives are financed through debt and circular deals involving chipmakers, cloud providers and model developers. When those relationships are tightly woven, a stumble at any one node can spread outward, creating risks that are hard to see from the outside.
International regulators have echoed the worry. The Bank for International Settlements warned that an AI bust could impact credit markets as severely as the 2008 crisis because of the heavy reliance on leveraged financing.
Market participants are already pricing in the risk. Nvidia’s recent wave of $750 billion in AI deals pushed its credit‑default swaps to record levels, signaling that lenders are demanding higher compensation for exposure to the sector.
While the current AI surge shares some traits with the dot‑com era—high valuations and concentration above 2000 levels—many leading firms now generate real profits, a difference from the largely unprofitable companies of the late 1990s.
Schmid stressed that the combination of massive spending, leveraged financing, and concentration among a handful of giant firms could transmit shocks to the broader economy, even if the sector remains fundamentally healthy. He also noted that AI‑driven demand for power, chips and construction adds a new variable to the Fed’s inflation outlook and interest‑rate decisions.
The shift in financing is palpable. AI outlays are catching up with Big Tech’s free cash flow, pushing companies to lean more on external capital. That transition pulls the Fed into the conversation, as credit‑market exposure falls under its supervisory remit.
Schmid’s remarks are part of a growing chorus of officials and analysts comparing the AI cycle to past manias. Though no one is predicting an imminent collapse, the use of “too big to fail” language signals that policymakers view AI as a potential stability issue rather than merely a market story.
Questo articolo è stato scritto con l'assistenza dell'IA.
News Factory APP - notizie agentiche per potenziare il tuo SEO e AEO.