AI firms vulnerable to sharp drop in valuations, Bank of England warns

"Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging. At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story."

"Tech firms are vulnerable to the risk that soaring valuations will drop sharply amid potentially disappointing progress around artificial intelligence (AI), the Bank of England has warned. The risk of a sharp correction in the financial markets has increased, the Bank's Financial Policy Committee (FPC) said. The minutes of the FPC's latest meeting read: On a number of measures, equity market valuations appear stretched, particularly for technology companies focused on artificial intelligence."

"This, when combined with increasing concentration within market indices, leaves equity markets particularly exposed should expectations around the impact of AI become less optimistic. It said there was a risk that disappointing progress on AI capability or adoption, or increased competition could drive valuations lower across the sector."

The Independent solicits donations to fund on-the-ground reporting across reproductive rights, climate change and Big Tech, highlighting investigations and a documentary called 'The A Word' about American women fighting for reproductive rights. The Independent avoids paywalls and relies on supporters to make quality journalism available to everyone. The Bank of England's Financial Policy Committee warns that technology company valuations, particularly those focused on artificial intelligence, appear stretched and face heightened risk of a sharp market correction. Increasing concentration within market indices amplifies exposure if expectations for AI weaken. Disappointing AI capability, slower adoption, increased competition, or material bottlenecks in power, data or commodity supply chains could push valuations lower.

Read at www.independent.co.uk