Read from bbc:
The Bank of England has warned of a "sharp correction" in the value of major tech companies with growing fears of an artificial intelligence (AI) bubble.
The Bank said the growth of the AI sector in the next five years would be fuelled by trillions of dollars of debt, raising financial stability risks if the value of the companies falls.
It cited industry figures forecasting spending on AI infrastructure could top $5tn (£3.8tn) and said much of this would be funded by AI firms themselves, but around half would come from outside sources, mostly through debt.
"Deeper links between AI firms and credit markets, and increasing interconnections between those firms, mean that, should an asset price correction occur, losses on lending could increase financial stability risks," it said.
The Bank of England is the latest institution to sound the alarm over a potential crash in the value of AI firms reminiscent of previous incidents such as the dotcom bubble.
Jamie Dimon, the chief executive of US bank JP Morgan, told the BBC in October he was "far more worried than others" about the risk of a serious market correction in the coming years.
The International Monetary Fund and the Organization for Economic Co-operation and Development have also warned of price corrections.
The dotcom booms refers to a period in the late 1990s, during which the values of early internet companies surged on a wave of optimism for what was then a new technology, before the bubble burst in early 2000 - with many share prices collapsing.
This led to some companies going bust, resulting in job losses.
A drop in share prices can also hit the value of people's savings including their pension funds.
The Bank of England has warned of a "sharp correction" in the value of major tech companies with growing fears of an artificial intelligence (AI) bubble.
The Bank said the growth of the AI sector in the next five years would be fuelled by trillions of dollars of debt, raising financial stability risks if the value of the companies falls.
It cited industry figures forecasting spending on AI infrastructure could top $5tn (£3.8tn) and said much of this would be funded by AI firms themselves, but around half would come from outside sources, mostly through debt.
"Deeper links between AI firms and credit markets, and increasing interconnections between those firms, mean that, should an asset price correction occur, losses on lending could increase financial stability risks," it said.
The Bank of England is the latest institution to sound the alarm over a potential crash in the value of AI firms reminiscent of previous incidents such as the dotcom bubble.
Jamie Dimon, the chief executive of US bank JP Morgan, told the BBC in October he was "far more worried than others" about the risk of a serious market correction in the coming years.
The International Monetary Fund and the Organization for Economic Co-operation and Development have also warned of price corrections.
The dotcom booms refers to a period in the late 1990s, during which the values of early internet companies surged on a wave of optimism for what was then a new technology, before the bubble burst in early 2000 - with many share prices collapsing.
This led to some companies going bust, resulting in job losses.
A drop in share prices can also hit the value of people's savings including their pension funds.