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The Bank of England investigates lending strategies that leverage data to boost AI betting.
The Bank of England (BoE) is investigating the rise of financial institutions lending to data centers as a way to speculate on the future of AI, according to Bloomberg. The BoE warns of risks if AI companies do not meet valuation expectations, which could lead to a correction similar to the dot-com bubble of 2000.
According to McKinsey & Co, the AI sector needs about 6.7 trillion USD in investment for data centers by 2030. The BoE has launched an investigation after noticing a shift in funding from hiring personnel to building data infrastructure.
The agency is concerned that large-scale lending could threaten financial stability, while also being criticized for proposing to limit stablecoin holdings to £10,000–£20,000. The BoE warns that if the trend of AI investment through borrowing continues, financial risks will significantly increase in the next decade.