Banque de France warning on AI financial bubble and European contagion, Digi Mart USA News: Emmanuel Moulin, Governor of the Banque de France, has warned of the risk of a financial bubble around artificial intelligence. Speaking at a conference in Barcelona on Monday, November 2, he cautioned that a fall in American company valuations could reach Europe, according to Maddyness.
His argument comes down to one sentence: “There can therefore be a contagion effect in Europe.” Massive investment in AI is increasingly funded by debt, which makes the system more fragile if the trend reverses.
Moulin, who also sits on the ECB Governing Council, does not predict a crash and remains optimistic about AI’s potential to raise productivity.
According to Moulin, technology giants are investing in AI at a pace considered excessive relative to the profits they generate. These expenditures, first financed from company equity, now rely increasingly on borrowing.
The market is comparing the situation to the Internet bubble of the late 1990s and early 2000s.
The risk for Europe runs through the stock market. Europeans reportedly hold between 15% and 20% of US securities, according to the estimates cited.
A correction on Wall Street would therefore reduce the value of savings and European fund portfolios.
The governor is also concerned about employment: companies that integrate AI most extensively are already reducing hiring, especially of young workers. This is the social side of a technology he otherwise considers promising.
Citing Reuters dispatches, Boursorama details this borrowing. US markets have absorbed more than $250 billion of technology debt since the start of the year, 81% more than in 2025.
In Europe, sector issuance reaches $39.3 billion, according to LSEG.
Christine Lagarde, President of the ECB, said borrowing by cloud giants has contributed to rising government debt yields. Fidelity International expects 40 to 60 billion euros of issuance in preparation, and BNP Paribas forecasts that net euro corporate bond supply will rise from 105 to 192 billion euros in 2027.
The warning follows a difficult October. The Nasdaq-100 lost more than $2 trillion in market capitalization over the month, with marked declines for Alphabet and Intel.
Nvidia, a supplier of the chips at the heart of these investments, serves as a barometer: its results, expected in mid-November, will indicate whether demand for equipment is slowing. The sources consulted for this article do not detail the Banque de France’s exposure to Nvidia or other stocks and do not make any recommendations.
For a French saver, contagion would mainly pass through equity funds, unit-linked life insurance and retirement savings plans, which often hold US securities. This does not constitute financial advice.
It remains to be seen whether the autumn correction will continue and whether European debt markets can absorb the expected wave of issuance for 2027. This article will be updated if the governor or the ECB clarify their analysis.
