Taiwan Central Bank Governor Yang Chin-long warned that the rapid AI boom could create a financial bubble if excessive borrowing continues [1].

This warning highlights the tension between the economic promise of artificial intelligence and the systemic risk posed by high-leverage investing. If productivity gains do not materialize to match the scale of investment, the resulting bubble could threaten regional financial stability [1].

Speaking at a press conference in Taipei on May 29, 2024, Yang addressed the surge in AI-related capital flows [2]. He said that while the technological shift offers growth, the manner in which that growth is funded creates vulnerability [1].

"We see a rapid rise in AI‑related investments, but we must avoid an AI bubble driven by excessive borrowing," Yang said [1].

The governor specifically targeted a demographic of newer market participants who may be more prone to high-risk strategies. He said that the allure of quick returns in the tech sector often leads to dangerous debt levels [1].

"Young investors should be cautious and not take on too much leverage in the AI sector," Yang said [1].

The central bank's focus remains on monitoring these trends to prevent a market correction from triggering a broader economic crisis. The institution intends to remain proactive in its oversight of the financial sector as AI integration continues across the economy [2].

A spokesperson for the Taiwan Central Bank said, "The central bank will take timely steps to ensure financial stability amid the AI boom and other uncertainties" [2].

“We see a rapid rise in AI‑related investments, but we must avoid an AI bubble driven by excessive borrowing.”

Taiwan is a global hub for semiconductor manufacturing and AI hardware, making its domestic financial stability critical to the global tech supply chain. By warning against leverage, the central bank is signaling that while it supports AI innovation, it views the current investment pace as potentially decoupled from actual productivity gains, which could lead to a volatile market correction.