"In its quarterly update on October 8, the Bank of England's Financial Policy Committee (FPC) issued a stark warning over the feverish investor enthusiasm surrounding AI, saying that "equity valuations appear stretched," especially in certain backward-looking metrics in U.S. stocks, and especially technology companies focused on AI."
"When combined with increasing concentration within market indices, the FPC added, equity markets find themselves "particularly exposed should expectations around the impact of AI become less optimistic.""
"He said Nvidia's $100 billion deal with OpenAI was an "opportunity to invest" in a company that Nvidia believes will be "the next multitrillion hyperscale company." He said OpenAI will pay Nvidia back through its offtake/future revenues, which he pointed out out are "growing exponentially," as well as capital it raises via future equity and debt sales, underscoring his own high levels of optimism around AI in general and the OpenAI example i"
The Bank of England's Financial Policy Committee warned that equity valuations appear stretched, particularly in backward-looking U.S. metrics and technology companies focused on AI. The FPC noted that increasing concentration within market indices makes equity markets particularly exposed should expectations around the impact of AI become less optimistic. Since June, risky asset valuations have risen while credit spreads compressed. Jeff Bezos described markets as in some kind of an "industrial bubble" yet argued that AI infrastructure investment will be worthwhile. Nvidia's CEO defended the $100 billion OpenAI deal as an opportunity to invest and highlighted rapidly growing offtake and revenue prospects.
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