Skip to content
, home

#29AI economyPublished

Deflate.

What if the bubble deflates while the technology keeps growing?

ThenewB drawing #29, “Deflate”. A bubble holding capital and capacity, linked by a value test to demand and returns. Caption: the technology may grow, the bubble may shrink.

In ten seconds

The IMF ranks a correction in AI-related valuations among the main risks to global financial stability.

The trigger

On 13 October 2026, the IMF published its Global Financial Stability Report, presented in Bangkok at its annual meetings. It places a correction in AI-related assets among three salient risks, alongside rising sovereign borrowing costs and a major cyberattack.

The dominant reading

Two camps face off. For some, AI is a bubble about to burst. For others, the technology justifies the valuations.

The tension

The two trajectories can diverge. Valuations can correct while usage keeps growing.

The analysis

The drawing sets two blocks against each other. On one side, the capital and capacity invested: data centres, chips, financing. On the other, demand and returns. In between, a value test the market has not yet settled.

For an executive committee or a board, predicting the correction is of little use. Which AI projects would hold if the cost of capital rose, or if a key provider disappeared?

What it changes

  • An AI project built on a single provider inherits its financial fragility.
  • Unit cost assumptions can change quickly, in either direction.
  • For a regulated entity, dependence on a provider also falls under DORA.

Action points

  1. 01Measure the value of each AI project on real usage, with tracked indicators.
  2. 02Prefer reversible commitments and architectures that allow switching models.
  3. 03Add AI provider risk to the risk map presented to the board.

Sources

Domains concerned

Related analyses

All perspectives

Ready to think differently?

Talk to us