Global investment in artificial intelligence is becoming overly concentrated and may be squeezing traditional industries, Xiao Yuanqi, deputy head of China’s National Financial Regulatory Administration, said on Tuesday at the Hong Kong Monetary Authority’s Global Financial Leaders’ Summit.
Xiao said a large influx of capital into technology companies had increased leverage in the sector and could contribute to excessively rapid expansion. He warned that this concentration can push up borrowing costs for traditional businesses, leaving them with less capacity to reinvest or expand production while increasing credit risks.
He called on policymakers to develop frameworks for managing the economic changes driven by AI and preventing related economic and financial risks.
Sources: Investing.com News.