Artificial intelligence became Wall Street's biggest fear in the Fed survey, beating out inflation and debt.
87% of 23 market insiders polled by the New York Fed called AI a risk to the financial system. In the spring it was 50%.
They are concerned that AI stocks will fall if earnings disappoint, about how the construction of AI is funded, and about cyber risks, from state hackers or "damage caused by AI models themselves." ".
The Fed's report says stock prices are high in part because of "the market's enthusiasm for superintelligence. "The debt raised for AI computing passed $680 billion by October, about five times as much as in 2023.
The major US banks have close to a trillion dollars of exposure to tech giants, data center builders, utilities and vehicles that finance them.