Bank of England Launches Probe into Data Center Loans Fueling AI Boom

The Bank of England (BOE) has launched a probe into a fast-growing trend among financiers, lending billions to data centers as a way to profit from the artificial intelligence boom. According to Bloomberg, regulators are increasingly concerned that these lending practices could become the next source of systemic risk if AI valuations collapse.

Officials fear the situation could mirror the early-2000s dot-com crash, as investors pour massive sums into AI-related infrastructure without a clear understanding of long-term returns. Data-center financing, while still niche, is expanding rapidly as investors seek exposure to the AI market without relying solely on tech stocks. McKinsey & Co. estimates that $6.7 trillion will be needed by 2030 to meet global demand for AI computing power.

The BOE reportedly launched its review after noticing a shift in capital flow—from hiring talent to constructing expensive, energy-intensive data centers. With limited publicly traded AI firms and tokenized AI equities still undeveloped, lending to data-center operators has become one of the few large-scale investment avenues available.

However, the BOE warns that such debt-financed bets could amplify financial instability. “If the projected scale of debt-financed AI and energy infrastructure investment materializes, financial stability risks are likely to grow,” the bank said, highlighting the potential for cascading credit exposure across banks and funds.

The BOE’s heightened scrutiny comes amid broader tension with the crypto industry, after proposing limits on individual stablecoin holdings between £10,000 and £20,000. Critics argue such restrictions stifle innovation—echoing concerns that over-regulation of AI funding could do the same.

As investors rush to fuel the AI revolution, Britain’s central bank appears determined to ensure the hype doesn’t ignite another financial crisis.