'Buckle up': IMF and Bank of England join growing chorus warning of an AI bubble (www.cnbc.com)

The International Monetary Fund and the Bank of England both warned this week that surging investor enthusiasm for AI is stretching stock market valuations and raising the risk of a sharp correction. IMF chief Kristalina Georgieva told investors to "buckle up," citing market shocks, soaring gold prices (a sign of anxiety) and easy financial conditions that can reverse quickly. The BoE’s meeting minutes explicitly flagged that disappointing AI capability or slower adoption, or heightened competition, could trigger a re‑rating of the high expected future earnings priced into AI‑focused tech stocks. Technically, concerns center on valuation dynamics and funding flows: while some large U.S. tech names do not look extreme on forward P/E (current price divided by expected next‑12‑month earnings), rapid AI investment growth, companies buying each other’s stock and cross‑financing could signal a later stage bubble. That raises near‑term implications for market volatility, corporate capex strategies, and central‑bank policy sensitivity to asset‑price risk. For practitioners and investors, the warnings underscore the importance of stress‑testing revenue/earnings assumptions tied to AI adoption timelines and preparing for abrupt sentiment shifts if technical progress or monetization lags expectations.