AI bubble at risk of bursting, says Bank of England

The Bank of England warned of a growing risk of a “sudden correction” in global markets yesterday and raised concern about soaring valuations of leading AI tech companies.

- Kalyeena Makortoff Heather Stewart

Continued hype and optimism about the potential for AI technology has led to a rise in valuations in recent months, with companies such as OpenAI now worth $500bn (£372bn), compared with $157bn last October. Another firm, Anthropic, has almost trebled its valuation, going from $60bn in March to $170bn last month.

The so-called “magnificent seven” of tech companies - Apple, Microsoft, Amazon, Google parent Alphabet, Facebook owner Meta, Nvidia, and Tesla - now make up a third of the value of the S&P 500 stock market index in the US, buoyed by investor optimism that multibillion-dollar investments in AI will pay off in terms of consumer and business demand for their products.