AI Debt Surge Bigger Risk Than Stock Bubbles, IMF Warns

A top International Monetary Fund official says the rapid increase in debt tied to artificial intelligence poses a greater threat to financial stability than high stock valuations. Tobias Adrian, the IMF’s financial counselor, warned that companies are borrowing heavily to fund AI projects, creating a potential “debt cliff” if those investments fail to generate expected returns. Unlike stock prices, which can correct gradually, a wave of AI-linked loan defaults could ripple through the banking system. Adrian stressed that regulators must monitor these borrowings closely to prevent a repeat of past financial crises.