[DigitalToday reporter Jinju Hong (홍진주)] The Bank for International Settlements (BIS) warned that the boom in artificial intelligence (AI) investment could spread as a risk factor across financial markets. If the race to invest in AI infrastructure delivers returns below expectations, shocks could ripple through markets. Bitcoin (BTC) could also face selling pressure early on because it may be classified as a risk asset, the analysis said.

On June 29, blockchain media outlet CryptoSlate reported that the BIS, in its annual economic report, forecast AI-related capital spending by five hyperscalers in 2025 to 2026 would exceed $1 trillion.

The BIS said the current AI investment race could exceed levels that can be justified by future profits. The report warned that if expected profits fail to materialise, funding could contract sharply. It said an AI investment boom could turn into a prolonged downturn and deliver a chain of shocks across financial markets.

The key issue is not AI's long-term growth potential but the current financial structure. Major AI companies such as Google, OpenAI and Anthropic are deploying vast sums even though stable profitability and the pace of depreciation for AI infrastructure have yet to be sufficiently verified. Investment has been concentrated across semiconductors, cloud services, data centres, power and network equipment, driving gains in tech stocks. But if competition overheats, it could lead to excess capacity and weaker profitability, it said.

The BIS compared the current situation to past investment booms in canals, railways, electricity and the internet. In those cases, the technologies themselves changed economic structures, but excessive inflows of investment capital were followed by sharp pullbacks and financial market corrections. The report said the current AI boom also resembles past cases in the scale and speed of investment and in high expectations for productivity gains.

It also cited the more complex funding structure this time as a risk factor. Early growth in AI investment could be funded by large technology companies' ample cash. But the current $1 trillion-scale investment is also using debt and various financing methods.

The BIS analysis said the interconnected risks in the financial system have grown larger than they appear on the surface, with corporate bonds, private credit, leasing finance, data centre construction, energy contracts and supply-chain contracts intertwined.

The cryptocurrency industry is also paying attention to these structural risks. Onramp Bitcoin said the AI industry is now forming a circular structure. Nvidia invests in AI firms such as OpenAI, AI firms use cloud services from Oracle and CoreWeave, and cloud providers in turn buy Nvidia's AI semiconductors, it said.

It said the same money can be reflected simultaneously in investment, revenue and financing in this process, making the market appear to grow more than actual demand.

If AI demand keeps expanding, this structure can be maintained. But if demand falls short of expectations, shocks could spread across the supply chain.

Semiconductor suppliers could see fewer orders and data centre operators could face lower utilisation rates. The private credit market could be exposed to risks of bad loans to technology companies, and banks may need to re-examine their exposure to non-bank financial institutions.

This is also what the bitcoin market is watching. The BIS said that if an AI investment slowdown gathers pace, tech stocks could wobble first. It said credit spreads could then widen, worsening financing conditions across markets. Investors who suffer losses in that process could sell highly liquid assets first, including cryptocurrencies. Even if bitcoin is not directly linked to the AI industry, it could fall together at the outset because it is included in the same risk-asset portfolios.

In the past, bitcoin has had cases where it failed to act as a safe haven even during periods of risk aversion. During a recent sharp drop in the KOSPI, bitcoin slipped below $63,000, showing it was more influenced by liquidity and investor sentiment than by scarcity.

Even so, some forecast the subsequent path could vary depending on policy responses. If an AI investment slowdown is limited to some technology companies, it could end at the level of a stock price adjustment. But the BIS said the AI investment boom has grown large enough to affect corporate investment and employment, household assets and credit markets. It also forecast that if high inflation persists, central banks will have limited room to cut rates, adding further pressure on risk assets.

On the other hand, if policymakers ease financial conditions again after a larger credit shock, bitcoin could enter a different phase. BitMEX co-founder Arthur Hayes has argued that bitcoin could rise sharply if authorities supply liquidity again. But observers said this scenario may still require enduring an initial steep decline first, making the first reaction of bitcoin to an AI investment slowdown more likely to be defensive.