Chinese Regulator Warns the AI Gold Rush Is Starving Traditional Industries of Credit
Global investment in artificial intelligence is “overly concentrated” and risks crowding out traditional industries by raising their borrowing costs, a senior Chinese financial regulator said on Tuesday, Reuters reported. Xiao Yuanqi, vice head of China’s National Financial Regulatory Administration, was speaking at the Hong Kong Monetary Authority’s Global Financial Leaders’ Summit.
He argued that the flood of capital into technology and leading firms has “driven up leverage levels within these areas” and could fuel excessively rapid expansion. “This concentration of capital creates a crowding-out effect on traditional industries,” he said, adding to their financial burden, reducing their capacity to reinvest and expand, and raising credit risk. He called on policymakers to “prepare policy frameworks specifically addressing this AI-driven transformation”, covering macroeconomic management and the prevention of financial risks.
The remarks come as investors worldwide question whether the vast sums going into AI infrastructure will earn adequate returns.
Source: reuters.com
