The record of the Bank of England Financial Policy Committee's meeting on September 25, 2026, whose cover is dated September 30, has a section headed "Developments in artificial intelligence and connections with funding markets." The FPC, the record says, "is a committee of the Bank of England." Part of the section is about how investment in AI is being financed, and which markets that financing reaches. Parts of the record follow, not the whole. The estimates it takes from other firms are not reported here.
Rapid growth, and more debt issued
Under the heading "Headline judgements and policy actions", the committee writes that "The rapid increase in artificial intelligence (AI)-related debt issuance broadens the exposure of capital markets to developments in AI." Financing of AI-related investment "continues to grow rapidly and is expected to remain on a strong upward trajectory," it says, and an increasing volume "is being financed through debt issuance, with global issuance in 2026 expected to exceed that of countries such as the UK."
The record also looks at the sterling market. Issuance by "AI hyperscalers" there "remained significantly smaller than in the US and euro area," it says, but "it had nevertheless accounted for 47% of GBP corporate bond issuance so far this year." That share is of corporate bonds in sterling, this year to date.
What makes the risk hard to judge
"The increasing indebtedness of AI firms combined with opacity and, at times, 'circular arrangements' that can be associated with this financing, can complicate the assessment of risks and could amplify losses if expectations disappoint." The record does not describe those arrangements.
Private markets are part of the picture. "The Committee noted that private markets were expected to play an increasingly important role in the financing of AI-related investment." The paragraph ends with a warning, that "The combination of increasing leverage, opacity and, at times, 'circular arrangements' that can be associated with this financing, could complicate the assessment of risks and could amplify losses if expectations disappointed."
Where the financing is hard to see into, the physical side of a campus can still be checked. Whether its power is contracted and its grid connection dated is a question a lender can put in writing.
A sell-off in July
Share prices have already moved. "AI-related and semiconductor stocks had fallen sharply in July," the record says, and "The sell-off exposed vulnerabilities among some leveraged investors with concentrated positions." It adds that "despite significant losses for some of these firms, market functioning remained orderly, with no spillovers to core markets and no signs of broader systemic stress." But "The risk of a sharper correction with spillovers to core markets persisted," and "A more significant shock to those earnings expectations, reflecting concerns around the pace of AI development or adoption, could trigger a sharper repricing."
The section's last paragraph reaches beyond the firms. "In addition, growth prospects and fiscal outlooks depended in part on expectations that AI development and adoption would generate significant productivity gains. A reassessment of those expectations could therefore affect not only AI-related asset valuations but also sovereign debt markets."
A central bank sees the money side of the build. The power side rests on the same expectation in another form, a plant or a grid connection sized for demand that still has to arrive.
Sources
- Bank of England, Financial Policy Committee. Record of the Financial Policy Committee meeting on 25 September 2026. 30 September 2026. central bank