Leading financial institutions are worried about a looming AI bubble (www.engadget.com)

The IMF and the Bank of England have both sounded the alarm about a potential AI bubble as equity prices for AI-focused firms surge. IMF chief Kristalina Georgieva warned investors to “buckle up,” citing optimism around AI-driven productivity that is inflating valuations, while the Bank of England flagged heightened risk of a sharp market correction and noted that tech valuations appear stretched. Official minutes also warned that disappointing AI capability growth, slower adoption, or tougher competition could force a rapid re‑rating of today’s high expected future earnings. For the AI/ML community this matters beyond headlines: massive capital commitments (Microsoft’s OpenAI deals, large purchases from AMD/NVIDIA, and rival investments from Google, Amazon and others) have intensified a compute-and-hardware arms race and driven product rollout pressure (Gemini, Copilot, Apple Intelligence, Anthropic offerings). If capability progress or real-world adoption lags, funding and M&A dynamics could shift quickly, favoring efficiency, cost-per-inference improvements, reproducible benchmarks, and clear product-market fit. Practitioners and startups should watch adoption metrics, model utility vs. hype, compute supply/cost trends, and unit economics — the variables most likely to trigger a market correction or a pivot in research and deployment priorities.