The International Monetary Fund (IMF) has warned that a potential correction in artificial intelligence investments and escalating cyber threats could trigger severe disruptions in the global financial system.
The warning was contained in the IMF’s latest Global Financial Stability Report, released on Tuesday during the annual meetings of the IMF and the World Bank in Bangkok, Thailand.
According to the report, the risks could trigger a sharp tightening of financial conditions and significant market turmoil.
AI Investment Boom Raises Concerns
The IMF said the rapid expansion of artificial intelligence, alongside increased investments in semiconductor manufacturing and data centres, had supported global economic growth despite geopolitical tensions, including the war in the Middle East.
However, the Fund warned that expectations surrounding AI investments could prove overly optimistic.
It noted that emerging evidence suggested AI capabilities could be delivered with lower investment levels than previously anticipated, while the potential economic gains might not be as substantial as expected.
The report cautioned that weaker investment, reduced profitability or less durable returns from AI projects could trigger a market correction.
Such a downturn could affect investors and financial markets that have benefited from the rapid growth of AI-related businesses.
Cyberattacks Could Disrupt Financial Markets
Beyond investment risks, the IMF warned that severe cyber incidents could undermine market confidence and disrupt critical financial infrastructure and operations.
Athanasios Vamvakidis, deputy director of the IMF’s Monetary and Capital Markets Department, told reporters that cyber threats to the financial system remained both known and unpredictable.
He said strengthening resilience before new economic shocks emerged should be a policy priority.
The report also warned that improving AI capabilities could make successful cyberattacks against major financial institutions and market infrastructure increasingly likely.
It added that rapid digitalisation had expanded the potential targets for attacks, raising the possibility of serious consequences for the financial system.
Emerging markets could face greater exposure because some countries had not committed sufficient resources to cyberattack prevention, Caio Ferreira, deputy division chief at the IMF’s Monetary and Capital Markets Department, said during the news conference.
However, the report noted that advanced AI models could also support cyber defence efforts.
IMF Flags Rising Bond Yields
The IMF identified rising government bond yields as another threat to global financial stability.
It warned that further increases in energy prices could reignite inflation, potentially forcing central banks to tighten monetary policy and pushing bond yields higher.
The report stressed the importance of sovereign bond markets to the global financial system, warning that disruptions in these markets could trigger broader financial shocks.
The latest assessment adds to concerns about the wider economic consequences of AI adoption, including its implications for employment, education and inequality.
The IMF urged policymakers to strengthen financial resilience and prepare for potential shocks as technological developments and geopolitical pressures reshape the global economic landscape.