IMF Warns AI Correction, Bond Yields and Cyberattacks Threaten Markets

The International Monetary Fund warned in a blog post that an AI market correction, rising sovereign bond yields and cyberattacks could cause broader financial stress. High borrowing, limited liquidity and stronger links between markets could amplify each risk.

The IMF said weaker AI investment or profits could reduce valuations for companies tied to the sector and trigger asset sales. Its review of 14 transactions since 2023 found about $300 billion in equity investment and $650 billion in debt linked to $1.4 trillion in future revenue commitments.

Higher sovereign bond yields could reduce valuations across other assets and lower the value of bonds used as collateral. The IMF also warned that cyberattacks could disrupt payments, trading, deposit access and other financial services, particularly if an incident affects a large financial institution, cloud provider or software platform.

The IMF called for limits on leverage and liquidity mismatches in AI, private credit and other nonbank financial sectors. It also recommended stronger cyber incident reporting, resilience testing and oversight of critical outside providers.