Bank of England governor Andrew Bailey has warned G20 finance ministers that a collapse of the artificial intelligence investment boom could trigger a disorderly global market correction. Writing in his capacity as chairman of the Financial Stability Board, he cautioned that markets remain vulnerable given fragilities in sovereign debt markets, and that rising leverage combined with high valuations and increasing cross-investment between AI firms and hyper-scalers could amplify any downturn. His intervention lands as G20 finance ministers meet in North Carolina and comes amid separate volatility linked to energy supply shocks from the US-Iran war.

Bailey said he remains concerned that a large shock, or combination of shocks, could trigger multiple vulnerabilities simultaneously. His warning coincided with UK Chancellor Rachel Reeves's colleague John Healey announcing a £100 million fund to back British AI start-ups, part of the government's push to build "Sovereign AI" capacity so the UK is not reliant on foreign-developed technology. Ministers hope firms will compete for the funding to tackle challenges such as NHS waiting lists, patient care, cybersecurity and defence, with Healey saying the scheme aims to spread AI's benefits to "every UK postcode".