The Bank for International Settlements has cautioned that the global race to build artificial intelligence infrastructure risks surpassing earlier technology booms in scale — and in the severity of the market disruption that could follow if the bet sours.
June 28, 2026 · Annual Economic Report 2026
The $1 Trillion AI Bet: A Boom That Could Echo the Canal, Rail and Dot-Com Busts
The world's central bank body warns that the scale of AI infrastructure spending — and the layered debt behind it — risks a disruptive correction if returns fall short of cost.
$1T+
Combined AI capex from the five biggest US hyperscalers across 2025–2026
$100B+
Gross corporate debt issued by hyperscalers in 2025, weighted to long-dated bonds
~18mo
Depreciation window on GPU hardware backing much of the borrowing
A bigger bet than the manias before it
The BIS lines today's AI build-out up against three historic investment booms — each ended in a painful correction.
AI build-out
2025–26 · $1T+
Illustrative scaling of relative magnitude — the AI surge is framed as potentially exceeding all three.
How a boom turns into a bust
1 · SPEND
Competitive rush to secure compute drives $1T+ in capex
→
2 · SHORTFALL
Returns fail to cover cost — net surplus turns negative
→
3 · TIGHTEN
Financing conditions snap tight; leverage unwinds fast
→
4 · RIPPLE
Investment bust spreads to credit and the wider economy
HIDDEN LEVERAGE
Off-balance-sheet financing structures
Ties to private credit providers
Circular financing — chipmakers and hyperscalers mixing equity stakes with purchase commitments
PHYSICAL CONSTRAINTS
Electricity supply bottlenecks
Advanced semiconductor shortages
Grid infrastructure limits on the build-out
The report stops short of predicting a crash — its warning is conditional on returns disappointing. But concentrated spending, layered financing and physical limits together create a risk profile investors and policymakers should take seriously.
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