Fed Report: AI Becomes the Top Financial-Stability Risk for the First Time

What happened

The report is the Fed’s twice-yearly official assessment of vulnerabilities in the US financial system. The survey was conducted by New York Fed staff in September and October, with respondents from banks, broker-dealers, investment funds and advisory firms. The Fed notes the survey summarizes what respondents told it and should not be read as the view of the Fed or the New York Fed.

The risks cited after AI were a risk-asset correction (52%), higher long-term rates (48%), cyberattacks (43%) and fiscal debt sustainability (43%). AI was cited by 50% of contacts in the spring survey and 30% in fall 2025; this is the first time AI tops the list.

Respondents named three AI concerns: elevated equity valuations that could fall if earnings disappoint; cyberattacks by state actors or damage caused by frontier AI models themselves; and complex forms of AI-related financing. The survey was conducted in September and October, before the turmoil at Nvidia after CEO Jensen Huang stepped down on Nov 12.

The debt numbers

The report also puts a number on computing finance: advanced computing-related debt issuance passed $680 billion by October 2026, about five times 2023’s $130 billion. Fed Vice Chair for Supervision Michelle Bowman warned in a Nov 10 speech that stocks could fall sharply if returns on AI investment disappoint.

On the day the report was released, Nvidia shares fell another 2%, for a weekly loss of 10%, with market value below $4 trillion for the first time since July. Nvidia reports third-quarter results on Nov 17, with interim CEO Colette Kress at the helm.

Key facts

1. Report: The Federal Reserve’s semiannual Financial Stability Report, released Nov 13, 2026
2. Survey: The New York Fed surveyed 23 market contacts in September and October; 87% named AI a salient risk
3. Change: AI was cited by 50% in the spring survey and 30% in fall 2025; this is the first time AI tops the list
4. Other risks: Risk-asset correction 52%, higher long-term rates 48%, cyberattacks 43%, fiscal debt sustainability 43%
5. Concerns: Elevated valuations and an earnings-driven correction, state-actor cyberattacks and damage from frontier models, complex AI-related financing
6. Debt: Advanced computing-related debt issuance passed $680 billion by October 2026, about five times 2023’s $130 billion
7. Caveat: The survey reflects respondents’ views, not the Fed’s or the New York Fed’s; it predates the Nvidia CEO resignation