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StatementFinanceComputeInternational IndiaConfirmed

BIS chief says the AI boom is now funded by debt and circular deals, and warrants caution

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Source: Bank for International Settlements

Pablo Hernández de Cos, general manager of the Bank for International Settlements, told the Global Fintech Fest in Mumbai that the five largest big tech firms are expected to spend more than $1 trillion on AI capital expenditure across 2025 and 2026, that global AI investment could rise from about $500bn to $3 to 4 trillion by 2030, and that the boom is increasingly funded by debt and private credit as capital spending outpaces cash flow. He described circular financing, in which chipmakers and hyperscalers take stakes in AI firms that commit to buying their chips and compute, as hard to observe and value, and said valuations are elevated and concentrated in a few firms. He compared the episode to the canal, railway, electrification and dotcom booms, said the scale and speed warrant some caution, and said AI does not change central banks’ mandate but makes the environment harder to read.

Why it matters

The head of the central banks’ bank has named circular financing and debt-funded capital spending as risks to watch.

When
10 Sep 2026
ID
WTA-N-2026-0283
Who
Bank for International Settlements; Pablo Hernández de Cos

Summary by wheresthe.ai, from Bank for International Settlements. Checked against the source on 13 Oct 2026.

Read the original at Bank for International Settlements

Source copy: download the page as saved on 18 Oct 2026 (PDF). Also held by the Internet Archive.

Next stop on this Storyline: Led toBIS: private credit lending to tech passed $1tn, with 46% of borrowers loss-making

Cite this story

WTA-N-2026-0283: “BIS chief says the AI boom is now funded by debt and circular deals, and warrants caution.” wheresthe.ai, 10 Sep 2026. https://wheresthe.ai/d/intl-bis-hernandez-de-cos-ai-boom-financing-2026-09/ (source: Bank for International Settlements).

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