London, Sept. 30 -- The rapid growth in artificial intelligence (AI)-related investment is increasing financial stability risks as more of the spending is being financed through debt and private credit, the Bank of England's Financial Policy Committee (FPC) said.

The FPC noted that AI-related financing had continued to grow rapidly and was expected to remain on a strong upward trajectory. The growing use of debt to fund AI investment means developments in the sector could increasingly affect a wider range of investors and funding markets.

It stated, "Concerns about the sustainability of AI-related earnings and capital expenditure growth may have contributed to market sentiment. The risk of a sharper correction with spillovers to core ma...