AI rockets to the top of financial-system worries in latest Fed survey

The Federal Reserve's semiannual Financial Stability Report, released Friday, found 87% of the 23 market contacts surveyed in September and October cited AI as a salient risk to the financial system, up from 50% in the spring and well ahead of the next concern, a risk-asset correction (52%). Respondents pointed to elevated AI equity valuations, AI-enabled cyberattacks and complex AI-related financing. The Fed said advanced-computing debt issuance topped $680 billion by October 2026, about five times the $130 billion issued in all of 2023, and that the AI investment cycle may soon outpace the 1990s telecom buildout.