The rapid expansion of artificial intelligence is creating financial stability risks as investment reaches a scale capable of influencing global economic conditions, Pablo Hernandez de Cos, head of the Bank for International Settlements (BIS, a global central-bank forum), said at a conference hosted by India’s central bank. The BIS estimates that the world’s five largest technology firms will invest more than $1 trillion in AI between 2025 and 2026, while industry forecasts put global AI investment at about $500 billion now and as much as $4 trillion by 2030. AI does not alter central banks’ monetary policy mandates, but it makes economies harder to assess by affecting demand, supply and financial markets at the same time. Hernandez de Cos said the boom is increasingly financed through debt and private credit, with funding that remains opaque and interconnected. AI-linked trade has benefited South Korea, Singapore, Malaysia and Taiwan through stronger export prices for chips and equipment. Generative AI (AI that creates content) has produced productivity gains of 10% to 65% in specific tasks, especially coding, consulting and professional writing, although the broader effect on economy-wide productivity remains uncertain. Estimates suggest AI could lift total factor productivity growth (output efficiency from labor and capital) by about half a percentage point annually, depending on adoption and the reallocation of workers and investment. Advanced economies are positioned to benefit first, while emerging-market prospects vary; Hernandez de Cos said India had a genuine opportunity to narrow the gap through its digital public infrastructure. He also warned that AI could displace routine cognitive work, with early signs in customer service, programming and administrative roles. Retraining and reskilling will therefore become more important, while high valuations, concentrated markets and opaque financing could expose vulnerabilities if corporate profits disappoint. Hernandez de Cos compared the scale and speed of the boom with earlier episodes including railway expansion and the dotcom surge, while stressing that its outcome will depend on policy, skills, infrastructure and how widely the benefits are shared.