Fed: AI Is Top Financial Risk, Cited by 87%

Artificial intelligence is now the most-cited threat to the U.S. financial system among market contacts surveyed by the Federal Reserve, according to the central bank's semiannual Financial Stability Report released Friday, Nov. 13. Eighty-seven percent of respondents named AI as a salient risk, up from 50% in the spring survey.

Key takeaways

• AI topped the Fed's fall survey of 23 market contacts at 87%, ahead of a risk-asset correction (52%) and higher long-term rates (48%).
• Debt issuance tied to advanced computing passed $680 billion by October 2026, about five times the $130 billion issued in all of 2023.
• Seven large tech firms carry more than $3 trillion in leases yet to start, guarantees and contract commitments, which the Fed says may understate their real exposure.

Fed survey: AI tops financial stability risks

Staff at the Federal Reserve Bank of New York polled 23 contacts at broker-dealers, banks, investment funds and advisory firms in September and October. The Fed notes the answers reflect respondents' views, not its own.

Respondents pointed to three AI concerns: stretched equity valuations that could fall if earnings disappoint, cyber risk from state actors "or damage caused by frontier AI models themselves," and complex forms of AI-related financing.

Source: Federal Reserve Financial Stability Report, November 2026 (23 contacts, September–October). In the spring survey of 20 contacts, 50% cited AI. Mentions of AI, higher long-term rates and cyberattacks rose the most.

AI data center debt: $680 billion and rising

A box in the report, "Leverage in the Data Center Buildout," puts numbers on the financing worry. Advanced computing–related borrowing rose from less than 6% of nonfinancial investment-grade corporate issuance in 2023 to about 31% in 2026. Outstanding public debt tied to the buildout is estimated at more than $1.1 trillion.

Off-balance-sheet items are growing faster. For Amazon, Alphabet, Broadcom, Meta, Microsoft, Nvidia and Oracle, leases not yet commenced exceed $1 trillion, and take-or-pay contracts, residual value guarantees and similar obligations exceed $2 trillion, the Fed said.

The report describes how hyperscalers sign long-term leases that developers use to secure construction loans, while GPU makers guarantee the resale value of chips used as collateral. Paired with equity stakes, that creates a "circular financing" dynamic, the Fed wrote. "The complex interlinkages among firms engaged in the data center buildout, public credit markets, private lenders, and special purpose financing vehicles create vulnerabilities that necessitate close monitoring," the report said.

Who holds the risk

Riskier subordinated slices of these deals sit with high-yield bond funds, life insurers and private credit vehicles. The largest U.S. bank holding companies have close to $1 trillion of exposure to big tech firms, data center developers, related special purpose entities and utilities, which the Fed evaluates in its annual stress test.

The Fed said those links may let the largest firms absorb losses in a downturn, but their economic exposure "may be substantially larger than suggested by their on-balance-sheet liabilities."

Context: valuations and the telecom comparison

Equity valuations remain high, "partly driven by market enthusiasm for super intelligence (SI)," the report said. The Fed compared the buildout with the late-1990s broadband cycle and said the pace of investment may surpass it "relatively soon."

The rest of the system looked steadier. The banking sector remained "sound and resilient," though hedge fund leverage hit its highest level since data began in 2013. The report also said reports of agentic AI systems involved in cyber events have increased since May. Demand for that capacity comes from AI labs whose revenue is still climbing; our earlier coverage tracked how Anthropic's revenue run rate cleared $65 billion.

What's next

The Fed's next Financial Stability Report is due in about six months and will show whether AI concerns keep rising. Investors will also watch hyperscaler debt sales and whether bank exposures change in next year's stress test.

FAQ

What is the Fed's Financial Stability Report?
A twice-yearly assessment of vulnerabilities in valuations, borrowing, financial-sector leverage and funding. The November 2026 edition reflects data as of Oct. 28.

Does the Fed predict an AI market crash?
No. The survey reflects the views of 23 contacts, and the report flags vulnerabilities rather than forecasting a correction.

How much AI-related debt has been issued?
More than $680 billion by October 2026, about five times the $130 billion issued in 2023, according to the Fed.

References

• Financial Stability Report – November 2026 — Board of Governors of the Federal Reserve System (Nov. 13, 2026)
• AI risks are the biggest threat to the financial system, Fed survey finds — CNBC (Nov. 13, 2026)