IMF Sees AI Correction Risk Steady as Market Leverage Grows

The International Monetary Fund rated the risk of an AI-driven market correction about the same as in April 2026, even as borrowing and trading exposure across the AI ecosystem grew.

A pullback in AI investment or weaker profits could pressure AI-linked stocks and credit, tightening financial conditions worldwide. The IMF listed an AI correction among three potential near-term triggers for market turmoil, alongside a sharp rise in sovereign bond yields and cyber threats.

Investment in data centers, semiconductors and related AI infrastructure has supported economic activity. Profits at companies central to the AI supply chain have also softened forward price-to-earnings pressure in several markets. But that support could weaken if investment or earnings disappoint.

Hyperscalers accounted for 10% of global investment-grade bond issuance in 2026 through July, compared with less than 1% in 2024. By June 2026, hedge funds’ gross equity positions and equity margin loans together reached about 15% of advanced-economy GDP, up from 10% in 2024. Single stocks’ share of leveraged exchange-traded funds rose from 16% to 28%, with figures through July.

Across 14 disclosed deals dating to 2023, the IMF counted roughly $300 billion of equity investment, $650 billion of debt and $1.4 trillion of commitments to buy services or chips. About $320 billion of the debt was taken on by companies receiving the investments as part of circular financing deals.

A modeled correction scenario puts global output 1.1% below baseline by 2028, U.S. output 1.8% lower and Asian output 1.7% lower. These are scenario estimates, not the IMF’s baseline forecast. The modeled effects include an investment unwind, falling asset prices, tighter financial conditions and spillovers through sovereign bond markets and demand for U.S. assets.

Advanced Asian stock markets more sensitive to global AI equity movements would likely face the largest hit. Markets with lower sensitivity could still feel spillovers through increased holdings of U.S. equities.