The governor of the Bank of England has cautioned governments across the globe that artificial intelligence could trigger a major international financial downturn.

In a message addressed to G20 finance ministers who are currently gathered in North Carolina, USA, Andrew Bailey stated that any potential collapse of the AI bubble could lead to a "future market correction" spreading worldwide.

His letter further highlighted the "volatility" stemming from the fallout of energy supply shocks caused by the US-Iran war.

Writing in his capacity as chairman of the Financial Stability Board, and international watchdog, he said that “markets remain vulnerable to a potentially disorderly correction that could spread across borders, particularly given fragilities in sovereign debt markets”.

He added: “The issue is not simply that investors are borrowing more, but that leverage is interacting with high valuations and market concentration, in particular the increasing cross-investment between artificial intelligence (AI) companies and hyper scalers, in a way that could amplify a future market correction.