Key takeaways
. Investment related to artificial intelligence (AI) is surging – both in nominal amounts and as a share of GDP – and currently accounts for a substantial share of economic growth.
. The size of anticipated investment needs will require firms to shift the source of financing from operating cash flows to debt, with private credit playing a rapidly increasing role.
. While macroeconomic and financial stability risks from the AI boom appear moderate, the boom’s sustainability hinges on AI firms meeting high earnings expectations. The fact that equity prices have run far ahead of debt market pricing underscores this tension.
Rapid advances in artificial intelligence (AI) appear set to reshape economies, industries and financial markets and AI firms have been a major driver of equity market developments over the past year (BIS (2025)). Yet AI-related innovations demand not only groundbreaking research but also substantial investment in infrastructure.
At the heart of this transformation lies a surge in capital expenditures to build the physical infrastructure for AI, eg data centres, and related technological infrastructure such as computer servers, networking hardware, cooling systems, grid connections and power stations. These investments are key in supporting the enormous demand for computational resources and data storage facilities to train and operate AI models.
The need to finance these investments is causing a shift in sourcing the financing from cash flows to debt. Leading firms in the information technology (IT) sector have historically financed much of their investments internally out of operating cash flows. However, the scale of current and anticipated AI related investment needs is now so vast that firms are seeking external sources of funding. They are therefore increasingly financing AI investment via debt, a shift that is not only reshaping corporate balance sheets but also raises important questions about credit standards and financial stability.
This Bulletin explores the AI investment boom. It first focuses on the boom’s macroeconomic dimensions. It then examines the evolving financing landscape and highlights the interplay between the surging demand for AI infrastructure and the financial mechanisms that support it, in particular private credit. The Bulletin concludes with a discussion of the possible consequences if the current optimism regarding the future returns on AI-related capital expenditures turns out to be unfounded.
More details: Financing the AI boom: from cash flows to debt
Banking 4.0 – „how was the experience for you”
„To be honest I think that Sinaia, your conference, is much better then Davos.”
Many more interesting quotes in the video below:
