During this period, both research reports from international organizations and the ups and downs of financial markets have been warning of the risks that the investment boom in artificial intelligence (AI) may bring. The global market's focus on the narrative of AI growth is shifting towards concerns about the amplification of financial risks by AI investment fever.

At the end of June, the Bank for International Settlements (BIS) warned in its annual economic report that excessive capital investment in the AI field has become a prominent risk point for global financial stability. The report suggests that the AI investment boom driven by market dominance competition is not only pushing up the prices of factors such as electricity and chips, but also more likely to cause rapid capital withdrawal due to lagging productivity returns. This warning was confirmed by the market at the end of July. The South Korean stock market experienced a significant decline, with major stock indices triggering circuit breakers twice. Due to the deep involvement of large semiconductor companies from South Korea in the global AI hardware supply chain, the severe market volatility is also confirming the vulnerability behind overheated investment. The AI investment boom is transforming into a risk variable that affects the operation of the global economy.

At present, massive funds are flowing to data centers, high-end chips and power facilities, and AI investment fever is rapidly inflating the debt foam. According to US media reports, Alphabet、 Amazon Meta、 Technology companies such as Oracle, Nvidia, and SpaceX, which are classified by the market as "AI hyperscale computing companies," have issued approximately $244 billion in bonds in the global bond market this year, more than double the $108 billion issued for the entire year last year. In 2024, this figure was only $17 billion. In mid July, Morgan Stanley data showed that the overall leverage ratio of ultra large scale cloud computing providers had increased from 0.9 times in the third quarter of 2025 to 1.8 times currently, doubling in just two quarters. Analysts predict that by 2027, the AI related capital expenditures of several giants will reach $1.1 trillion, accounting for approximately 3.2% of the estimated gross domestic product (GDP) in the United States.

The AI investment boom has also increased production costs for enterprises and become one of the important factors driving up inflation levels. The concentrated outbreak of procurement demand has directly pushed up the prices of electricity, chips, and related equipment, thereby becoming a "booster" for inflation levels. On July 8th, the Federal Reserve released the minutes of the Federal Open Market Committee meeting from June 16th to 17th, which showed that policymakers' concerns about inflation have intensified, believing that the inflation rate continues to rise and remains far above the long-term target of 2%. Among them, both the core inflation rate and the overall inflation rate have increased, mainly due to the continued impact of tariffs, supply chain disruptions related to the closure of the Strait of Hormuz, and strong demand for certain goods and services driven by strong AI related investments.

Some analysts believe that in the current investment frenzy in the AI field, there is a cycle of cloud vendors investing in AI labs and labs then returning funds in the form of computing power procurement. This complex financial relationship makes it difficult to see the real risks clearly. The similar situation is similar to several overheated investments in western history, such as the canal construction boom, railway construction boom and the Internet foam period. Their common feature is that a technological breakthrough attracts capital inflows far beyond what commercial returns can sustain. If the efficiency improvement brought by AI is not realized as scheduled, the speed of financing contraction will be much faster than the construction cycle of physical facilities, thereby forming a cross regional chain impact along the industrial chain.

The recent performance of the Korean market provides a practical reference for this risk. As an important global indicator of AI investment heat, the South Korean stock market experienced severe fluctuations at the end of July. On July 28th, the South Korean Composite Stock Index fell more than 8% during trading and triggered a circuit breaker, closing down 10.84%. Samsung Electronics and SK Hynix, two leading chip companies that hold a majority weight in the stock index, fell by over 13% and 14% respectively. According to statistics from the Korean Stock Exchange, foreign investors sold approximately 4.99 trillion Korean won in the KOSPI market on that day. For countries located upstream in the AI industry chain, economic growth is closely linked to fluctuations in global technology investment. Once investment decreases, these countries' exports and financial markets will be directly affected.

If there is a trend of contraction in AI investment, its spillover effects will far exceed those of the technology sector itself. Firstly, the cliff like decline in hardware demand will directly impact the trade balance of export-oriented economies such as Japan and South Korea, leading to a deterioration of the current account. Secondly, as corporate profit expectations decrease, the credit risk of related bonds will be repriced, posing a threat to the stability of the credit market. Finally, due to the high proportion of technology equity in global pension and mutual funds, drastic adjustments in asset prices will suppress household consumption through wealth effects. The extreme volatility of the South Korean stock market from a sharp decline to a rebound in the short term indicates that under the background of high leverage and concentration, the market's ability to self repair is weakened, and the herd effect of capital flow is highly likely to trigger systemic volatility.

The AI investment boom not only undermines the achievements of global efforts to combat inflation, but also accumulates hidden dangers in the financial system. Decision makers and market participants in various countries should go beyond focusing on the declared investment scale of enterprises and closely monitor leading indicators such as computing power utilization, electricity consumption elasticity, and enterprise free cash flow. Only by identifying foam and preventing risks can we ensure that technological innovation is truly transformed into a long-term growth engine that benefits the world, rather than the trigger of the next crisis.