The Bank for International Settlements (BIS), known as the "central bank of central banks," has issued a warning about increasing risks within the artificial intelligence (AI) industry. The BIS, which serves as a forum for central banks worldwide, highlighted concerns over rising debt levels and unclear financing practices in the sector. While AI-related stocks have seen significant gains over the past two years, the BIS points to growing doubts about the long-term profitability of these companies, especially as major American tech firms accumulate more debt. Frank Smets, head of economic analysis at the BIS, explained that the AI-driven optimism that helped boost global stock markets and support economic stability last year is now showing signs of weakness. Although investors have remained relatively willing to take risks recently, there is uncertainty about whether this trend will continue, particularly if interest rates on government bonds continue to rise. Higher bond yields can increase borrowing costs for companies and governments, adding to financial pressures. The BIS report also emphasized the broader uncertainties facing the global economy, including unpredictable government finances, geopolitical conflicts, and fluctuating energy prices. It warned that the large amounts of debt taken on by AI companies could further raise borrowing costs in government bond markets, making it harder to sustain current levels of debt. Smets expressed particular concern about the speed at which debt has grown in the AI sector and the complexity of its financing. Many of these financial arrangements are not fully visible on company balance sheets and involve intricate connections between different financial entities. According to the BIS report, private financing for AI-related technology companies has grown dramatically, from about $22 billion, or 22% of all private credit, in 2010 to over $1,000 billion, or 44%, by 2025. The total amount of all types of loans in the sector now exceeds $2,500 billion.