Central Bankers warn AI Bubble is similiar to conditions before the Great Depression

[SamuelTheThird]

https://www.telegraph.co.uk/business/2026/06/28/ai-boom-risks-global-financial-crash-central-bankers-warn/

The BIS, known as the bank for central banks, said there was growing “peril” in financial markets from the complex web of financial ties between AI giants, shadow banks and data centre builders unravelling.

“Financial stability could ... be at risk in the event of an AI bust,” the BIS said. “Should hyperscalers slow or halt the aggressive pace of capex deployment, many borrowers across the supply chain could struggle to replace lost revenue and service their debt.
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The BIS warning is one of the strongest yet on risks lurking in the AI boom. The Bank of England warned in December that share prices were now the “most stretched” they had been since the 2008 crisis.
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The bank noted there were parallels between the AI infrastructure surge and the dotcom boom, as well as similarities with the British railway mania of the 1840s or the “roaring 20s” before the Great Depression.

[oasis]

1. Hope for the best, prepare for the worst.

[JCMach1]

2. So I guess the coming oil crunch will have nothing to do with it...

I smell some finger pointing.

[AZJonnie]

3. The 2007-08 crash was immediate preceded by $120+ prices per barrel of oil

Nothing *that* bad seems imminent, but it's worth noting the precedent IMHO.

[JCMach1]

4. It is rarely so simple as one thing no matter what the MSM

Wants us to believe. Plus they would rather have the sheep blame big tech rather than the oligarchy's oil war.

[paleotn]

9. Big tech was causing serious financial instability...

back in 2025 when we were in the midst of an oil glut and gas was under $3. Borrowing a ton of money on ephemeral hype and fever dreams tends to do that. When they can't service the debt because "build it and they will come" is a grossly irresponsible business plan, the cascade of defaults spirals. 2007 / 2008 on steroids.

[JCMach1]

12. Th

The tech comp is 2000 though I beleive, but combined with an oil shock... Ummmm

[Martin68]

5. Krugman compares it to the tech bubble: tremendous over-valuation of companies that are making no profits.

[SamuelTheThird]

14. It's worse than the tech bubble

It's a larger percentage of the market. And the tech bubble most strongly impacted smaller companies, not the ones propping things up.

[LudwigPastorius]

15. Yes.

Anyone who has an S&P index fund has over half of that money invested in AI - whether they know it or not.

https://seekingalpha.com/news/4593080-ai-trade-accounts-for-over-half-of-sp-500-weight---jpm

[ToxMarz]

6. It's not about the technology at this point, it's down to just a giant grift and cash grab

a dangerous game of musical chairs. That it's going to crash isn't the concern, it's to be the last man standing holding the cash.

[not fooled]

7. Exhibit A: f-eloon cashing out

when he did, after grifting his AI company onto SpaceXplosion.

He knows what's coming. All of the tech psychos know.

[paleotn]

11. Perhaps, but many don't know.

They actually believe their own garbage. Just because someone finds themselves rich and in charge of some company, or even president of the US for that matter, doesn't mean they're intelligent and have any rational idea what they're doing. No grand scheme or even an exit strategy. Musk for instance is about as talented as the average 13 year old hyped up on sugar and energy drinks in mom's basement. They may think they're "masters of the universe" and our vapid media may fawn on them, but in reality, they're mediocre. Fortune simply smiled on them for no apparent reason. She does that from time to time.

In my mind, those are the most dangerous people on earth. They have to the tools to do great damage, but not the good sense to even protect themselves from the fall out. That's why financiers and business types throwing themselves out of windows during a panic isn't all that uncommon.

[flashman13]

8. I have been saying for some time that conditions are very similar to the period just before the Great Depression.

If you are interested, I highly recommend John Kenneth Galbraith's book, The Great Crash.

The AI industry is a giant incestuous money merry-go-round very similar to the stock holding companies of the 1920s. Then you had this multi-layered situation of holding companies whose only assets were stocks in other holding companies that owned other holding companies. All of this was financed on margin loans. When the actual operating company's stock went down in value, the margin calls went out and the whole mess unraveled in hours. Now it is chip companies that are financing data centers that return the money by buying chips. On paper it looks like they are making money even though paying customers don't provide enough income to pay the light bill.

[Blue Full Moon]

10. Not a secret. Was reported on before the 2024 election.

[SamuelTheThird]

13. Yeah, but look who is saying it now

[CaptainTruth]

16. It's the dot com bubble all over again.