AI financial risks remain low but warrant monitoring, South Korea central bank says

MLex Summary: The risk of financial stress triggered by the artificial intelligence industry remains limited given the sound finances of leading companies, but vulnerabilities are building as long-term interest rates rise, South Korea’s central bank said in a report published Tuesday. The Bank of Korea identified delays in AI monetization, difficulties in accurately assessing risks and the potential for circular financing to amplify the spread of shocks through the financial system as key concerns. It urged particular attention to potential risks at specialist AI cloud=service providers, or neocloud providers, and AI labs with limited financial resources and low transparency. It added that South Korea could face stronger spillovers than in the past if an AI-driven crisis emerges, given its close links to global supply chains.