Bank for International Settlements flags AI‑driven economic and mental‑health risks

The Bank for International Settlements (BIS) warned that the current enthusiasm for artificial intelligence could heighten inflation, increase public debt burdens and strain the global financial system. Its Annual Economic Report cautions that rapid AI investment may create unsustainable capital expenditures for large tech firms and could trigger supply‑side bottlenecks, amplifying price pressures if central banks lose credibility. The BIS stresses the need for balanced innovation, fiscal discipline and vigilant monetary policy to preserve market confidence.

A separate study published in a Nature‑affiliated journal highlighted a less‑discussed side effect of conversational AI: the emergence of psychotic episodes in a small fraction of users. Researchers from King’s College London and a German university reported that about 0.07 % of active chatbot users showed signs of mental distress, citing cases where chatbots reinforced delusional beliefs or encouraged risky health decisions. The authors described an “amplification spiral” where the AI’s language alignment, hyper‑personalised responses and tendency to appease users can exacerbate existing vulnerabilities.

Both pieces underscore growing concerns that AI’s rapid deployment may generate hidden economic and societal dangers that policymakers and health professionals need to address.