A series of reports published this week has raised new concerns about the potential risks of the artificial intelligence boom.

The Bank of England warned today that the likelihood of a “sharp market correction” has increased. One of the reasons is that “on a number of measures, equity market valuations appear stretched, particularly for technology companies focused on artificial intelligence,” the bank’s financial policy committee stated.

The statement follows a pair of Tuesday reports by Bloomberg and NBC News that scrutinized the circular business relationships between major AI industry players. The reports focused on the sizable investments that Nvidia Corp. and Advanced Micro Devices Inc. have made in language model startups. In some cases, those startups are using the capital to buy Nvidia and AMD graphics cards. 

It’s believed that xAI Holdings Corp. could soon join the list of AI developers involved in such circular deals. Bloomberg reported on Tuesday that the Elon Musk-backed OpenAI rival plans to raise up to $2 billion in funding from Nvidia. Earlier this year, xAI began building a supercomputer called Colossus 2 that is expected to house 550,000 Nvidia chips.

If the AI spending boom is a bubble, the associated financial risks could affect not only language model developers and their chip suppliers but also the broader economy. On Tuesday, NBC News cited research firm Oxford Economics as saying that an AI market crash could lead to “a sharp correction in tech stocks, with negative knock-ons for the real economy.”

The new reports don’t mark the first time that concerns about the AI industry’s financial risks have come to the fore. The impact of AI spending on the broader economy was the focus of an X post series published last month by economist Jason Furman. In one post, the former director of the White House’s Council of Economic Advisers estimated that AI spending accounted for 92% of U.S. GDP growth in the first half of 2025.

“Absent the AI boom we would probably have lower interest rates & electricity prices, thus some additional growth in other sectors,” Furman added. “In very rough terms that could maybe make up about half of what we got from the AI boom.”

Earlier, an MIT report about companies’ struggles to realize a return on generative AI pilot projects caused a 1.2% drop in the Nasdaq. It’s believed the selloff was also influenced by an interview in which OpenAI Chief Executive Officer Sam Altman stated that the AI market could be in a bubble. Several other prominent tech industry figures echoed that sentiment.

OpenAI reportedly expects to become cash-flow positive by the end the decade. Nvidia, in turn, told Bloomberg today that it “does not require any of the companies we invest in to use Nvidia technology.”

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