The Bank for International Settlements warns: A flurry of market frenzy signals suggest the AI spending spree may end in a sustained "investment recession."

According to Mars Finance, on June 28th, the Bank for International Settlements (BIS) issued a stern warning in its annual economic report released on Sunday, stating that the AI spending spree by large tech companies may end in a sustained "investment recession," potentially impacting financial markets and the global economy. The BIS points out that the five largest hyperscale cloud providers are projected to invest over $1 trillion by the end of 2025-2026, but if returns in the tech sector fall short of expectations, investors may quickly tighten financing, causing the capital expenditure boom to abruptly turn into a long-term investment recession. The report cites historical precedents—the canal construction of the 1830s, the British railway boom of the 1840s, and the dot-com bubble of the late 1990s—all sharing a common characteristic: "genuine technological breakthroughs attracted capital exceeding what commercial returns could support," ultimately ending in an investment reversal and triggering an economic recession. Just as the BIS issued its warning, a flurry of market frenzy signals emerged: SpaceX launched a $25 billion bond issuance shortly after its record $86 billion IPO, prompting Allianz's chief investment officer to declare this week that the market had entered "bubble territory"; tech companies are leveraging near-century-low credit spreads to issue bonds across global credit markets to finance AI projects, with hundreds of billions of dollars pouring in. The BIS added that, unlike previous cycles, households currently have higher equity exposure relative to their wealth and income, meaning a significant correction in AI-related stocks would have a more severe impact on the real economy. Furthermore, the massive bond issuance by AI companies to raise funds could jeopardize financial stability. In addition, the energy disruptions caused by the near closure of the Strait of Hormuz continue to push up inflation, placing global central banks under multiple pressures from persistent inflation, the sustainability of AI investment, increased financial vulnerability, and deteriorating fiscal conditions.