Bank of England governor Andrew Bailey has warned that investors are valuing artificial intelligence companies on the assumption they cannot fail, leaving markets exposed if the bets do not pay off.

According to Bailey, huge sums are flowing into the sector, with the four largest United States hyperscalers guiding to roughly 720 to 745 billion dollars of capital spending in 2026. About 450 billion dollars of AI-related debt has been issued by early September, more than double the whole of 2025.

Analysts note the technology itself is real. Nvidia reported net income of 59.7 billion dollars in the quarter to July 26, 2026, and its market value has crossed 5.5 trillion dollars. But commentators warn that valuations now require revenue that does not yet exist.

Bailey compared the moment to past market shifts, noting that early leaders often lose. He said the Bank of England is working to keep the financial system resilient against a shock.

With OpenAI and Anthropic preparing public listings, the debate over whether AI is a revolution or a financing bubble will stay at the centre of markets this year.