Global recession and the end of the middle class: What 'AI exuberance' could do to the world [View all]

One of the world’s most respected economic institutions has warned that the AI boom powering the Australian and global economies could create an international recession, obliterating middle-class jobs along the way.

In some of the bleakest commentary on the AI rise that has underpinned the resurgence in the US economy and which is on track to surpass the mining boom in importance to Australia, the Bank for International Settlements (BIS) said overnight that there were substantial doubts whether the current tech expansion was sustainable.

The bank, which in the mid-2000s accurately said a build-up in property loans in the US banking system could lead to a financial crisis, used its annual report to highlight how dependent the global economy has become on the AI boom.

Five US companies, including Microsoft, Meta and Amazon, are forecast to spend $US1 trillion ($1.45 trillion) over the next 12 months on AI-related infrastructure. The increase, coupled with past investments, is expected to lift US productivity, which has outperformed the rest of the world over recent years.

https://www.theage.com.au/politics/federal/global-recession-and-the-end-of-the-middle-class-what-ai-exuberance-could-do-to-the-world-20260626-p60ag6.html

https://archive.md/093fG