BIS: The AI Investment Race: The AI boom is becoming one of the largest technology-driven investment cycles in US history. Like the railway and dot-com booms, intense competition may push companies to invest far beyond economically efficient levels. Key Findings: 📌 Firms are racing to secure market share in a winner-takes-most environment. 📌 AI investment could exceed the socially efficient level by roughly 50%. 📌 Debt financing and circular financial relationships increase fragility across the sector. 📌 Specialised AI hardware may suffer steep losses and forced asset sales during a downturn. 📌 The larger and faster the investment boom, the more disruptive the potential bust. 📌 The boom can remain sustainable only if AI delivers significant productivity and commercial returns. 📌 In a concentrated and interconnected industry, the failure of one major company could spread financial stress across the broader AI ecosystem. Link 🔗: https://t.co/6jHrcLLe05