Taiwan Central Bank Warns of AI Investment Bubble and Risks to Global Employment

Taiwan’s central bank included artificial intelligence among the five major risks to the global economy for the first time in its Financial Stability Report. The bank highlighted the vast sums companies are investing in computing capacity, data centers and model development. If the expected productivity and profits fail to materialize, valuation corrections could spread to equities, credit markets and financial institutions. AI adoption could also intensify layoffs and job displacement.

The latest report said the main risk from the AI boom is that weaker-than-expected investment returns could cause the bubble to burst, with geopolitical and other factors potentially compounding the fallout. The central bank did not disclose total AI investment, the number of jobs that could be affected or a specific timeframe. The only confirmed quantitative detail is that it identified five major risks to the global economy.