Bank for International Settlements warns: market frenzy signals are flashing intensively, and the AI spending spree may end in a sustained "investment recession".

BlockBeats News, June 28 - The Bank for International Settlements (BIS) issued a stark warning in its annual economic report released on Sunday, stating that the AI spending spree by major tech companies could end in a persistent "investment recession" and potentially impact financial markets and even the global economy. The BIS noted that the current top five hyperscale cloud providers are expected to invest a total of over $1 trillion by the end of 2025 and 2026. However, if returns in the tech sector fall short of expectations, investors could quickly tighten funding, turning the capital expenditure boom into a prolonged investment recession. The report cited historical precedents—canal construction in the 1830s, the British railway boom in the 1840s, and the internet bubble in the late 1990s—all sharing a common feature: "genuine technological breakthroughs attracted capital beyond what commercial returns could support," ultimately ending in investment reversals that triggered economic recessions.

Just as the BIS issued its warning, market frenzy signals have emerged intensively:

Shortly after SpaceX's record-breaking $86 billion IPO, it launched a $25 billion bond issuance. Allianz's Chief Investment Officer pointed out this week that this marks the market having entered a "bubble zone";

Tech companies are taking advantage of credit spreads near their lowest levels this century to aggressively issue bonds in global credit markets to finance AI projects, with tens of billions of dollars pouring in.

The BIS added that, unlike previous cycles, households currently have higher stock exposure relative to their wealth and income. If AI-related stock markets experience a significant correction, the impact on the real economy could be more severe. At the same time, AI companies issuing large volumes of bonds to raise funds could also threaten financial stability. Furthermore, energy disruptions caused by the near-closure of the Strait of Hormuz continue to drive up inflation. Central banks around the world face multiple pressures from persistent inflation, the sustainability of AI investment, increased financial fragility, and deteriorating fiscal conditions.