The Bank for International Settlements warned that the two-year AI-driven equity rally is becoming more fragile as major U.S. technology companies increase leverage and investors question whether future returns will justify spending. Alphabet, Amazon, Meta, Microsoft and Oracle are projected to invest more than $1 trillion in AI-related capital expenditures across 2025 and 2026. BIS head of economic analysis Frank Smets compared the surge with earlier speculative episodes, including canal, railway, electrification and dotcom booms, while noting that electricity and chip shortages could constrain delivery of AI infrastructure. The BIS also highlighted circular financing arrangements involving poorly disclosed equity stakes and commitments. Technology companies' private-credit borrowing rose from around $22 billion, or 22% of total private credit, in 2010 to more than $1 trillion, or 44%, by 2025; total outstanding loans of any type reached almost $2.5 trillion. A disappointing return on AI investment could trigger a financing pullback that affects both equity valuations and broader credit conditions. Despite those risks, the BIS previously said there were no overall signs of market stress and that investor risk appetite remained resilient. It has also warned that pressure on public finances, geopolitical tensions and volatile energy prices were lifting government borrowing costs, while increasingly complex central-bank communication around core inflation could make public messaging harder.