Bloomberg said that the Bank of England is investigating the rise of financiers who lend to data centers as a way to speculate on the future of artificial intelligence.
It was already the largest bank in the UK to examine Market risks that could arise if AI companies fail to meet high valuations, warning that many of them could collapse in a correction reminiscent of the dot-com bubble of the early 2000s.
Now, the company is exploring the relationship between AI companies and financiers looking to bet on the AI market, according to Bloomberg. I mentioned Friday.
Although data center lending remains a niche market, it is expected to become a critical source of financing, with an estimated $6.7 trillion needed by 2030 to keep up with the growing demand for AI operation, McKinsey & Company. He said In April.
Bloomberg said the investigation began after the Bank of England noticed an increasing amount of money being diverted from hiring employees to spending billions of dollars on building data centers.
With few native AI stocks available and crypto tokenization not ready for private AI stocks at scale, turning to data center lending has been one of the few ways to place big bets in the AI space.
Hesitant with artificial intelligence, ruthless with cryptocurrencies
The Bank of England investigation may mean that this strategy faces future regulatory limits, which could limit returns and slow AI innovation.
UK crypto groups have also criticized the Bank of England’s proposal to limit individual stablecoin holdings to between £10,000 ($13,310) and £20,000 ($26,620) – claiming that it is not only restrictive, but also difficult and expensive to implement.
While the Bank of England has said it will not impose these restrictions forever, British banks have also imposed measures of their own, with around 40% of the 2,000 cryptocurrency investors surveyed saying their banks have either blocked or delayed payments to a cryptocurrency provider.
The Bank of England fears that lending to data centers will lead to financial instability
However, the UK’s largest bank argues that these emerging lending practices warrant closer scrutiny due to their potential implications for financial stability.
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“If the expected scale of debt-financed AI and energy-related infrastructure investment materializes during this decade, financial stability risks are likely to grow,” she said on Friday.
“Banks will be exposed to this directly through their credit exposures to AI companies, as well as indirectly through the provision of loans and credit facilities to private credit funds and other financial institutions exposed to asset prices affected by AI.”
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