A sign installed on a fence at the Nscale data center project on October 15, 2026 in Barstow, Texas.
Eli Hartman | Bloomberg | Getty Images
The threat posed by artificial intelligence topped the list of biggest risks to the financial system, far outweighing other dangers, according to respondents to a Federal Reserve survey released Friday.
The central bank’s twice-yearly Risks Survey found a sharp increase in respondents saying the biggest danger comes from AI across multiple fronts, including debt, stock market valuations and security risks.
“Respondents pointed to three distinct areas of concern: (1) rising stock valuations and the potential for lower-than-expected returns to result in lower valuations and market corrections, (2) cybersecurity risks from malicious attacks by sophisticated state actors or damage caused by frontier AI models themselves, and (3) risks associated with complex forms of AI-related financing,” the report said.
The report finds that while Wall Street is on edge over high-flying AI hyperscalers, the community is alarmed by the rapid proliferation of data centers used to power the technology. About 56% of voters in this month’s midterm elections said data centers were extremely important or important in their choice, according to exit polls.
Respondents to the Fed survey released Friday included a variety of market participants, economists, analysts and institutional officials. The report covers the period up to October 28, just days before the election.
Of this group, 87% cited AI as a “significant risk” to their systems. This is up from 50% in this spring’s survey and is well ahead of the next most cited risk, the correction of risk assets (mentioned by 52% of those surveyed).
Other key risks are rising long-term interest rates (48%), cyberattacks (43%), and fiscal debt sustainability (43%), the latter of which comes as the U.S. debt exceeds $40 trillion and the budget deficit approaches $2 trillion.
The report said hedge fund leverage was the highest since 2013 and concentrated in a relatively small group, but said the system was fairly stable.
