International financial institution Nomura recently released a research report that large-scale development of artificial intelligence has become an important engine of US economic growth, but it is also putting pressure on the US economy in many ways. If AI development were to be thwarted, it could expose America's rising risk premium. According to the report, risks brought about by the US AI boom include rising chip and electricity prices driving up inflation, surging imports of chips and technology equipment widening trade deficits, and large cloud computing companies issuing large numbers of bonds to boost US Treasury yields. Furthermore, due to net capital inflows and abnormal capital gains brought about by the rise in the US stock market driven by AI, the net debt of US international investment positions increased dramatically. According to estimates by analysts Nomura, the ratio of the net debt of US international investment positions to the total net assets of all net creditor countries has soared to 80%. The report points out that due to the high valuation of the US stock market and weakening economic fundamentals, if AI development is frustrated, it may trigger a major adjustment in the US capital market. Given the large exposure of foreign investors to US stocks, as well as leverage and revolving financing within the AI ecosystem, the adjustment could evolve into a “global safe-haven event.” According to the report, there are opinions that due to the large scale of the US economy, the depth and liquidity of the capital market, and the status of the US dollar as a global reserve currency, US dollar assets are “irreplaceable.” However, the pillars on which the dollar's dominant asset position depends are weakening, and external trust in US fiscal and trade policies, safety and security policies, and the independence of the Federal Reserve has declined. The report points out that the US is still highly dependent on foreign capital inflows to make up for the ever-widening fiscal and current account deficits, but the huge double deficit is unsustainable. The rising debt burden is like a “time bomb hanging over the head,” and related pressures are piling up. According to the report, given the surge in net debt in US international investment positions and the high concentration of international investment position assets in other countries in the US, moderate risk reduction by foreign investors will “be enough to cause the dollar to depreciate.”

International financial institution Nomura recently released a research report that large-scale development of artificial intelligence has become an important engine of US economic growth, but it is also putting pressure on the US economy in many ways. If AI development were to be thwarted, it could expose America's rising risk premium. According to the report, risks brought about by the US AI boom include rising chip and electricity prices driving up inflation, surging imports of chips and technology equipment widening trade deficits, and large cloud computing companies issuing large numbers of bonds to boost US Treasury yields. Furthermore, due to net capital inflows and abnormal capital gains brought about by the rise in the US stock market driven by AI, the net debt of US international investment positions increased dramatically. According to estimates by analysts Nomura, the ratio of the net debt of US international investment positions to the total net assets of all net creditor countries has soared to 80%. The report points out that due to the high valuation of the US stock market and weakening economic fundamentals, if AI development is frustrated, it may trigger a major adjustment in the US capital market. Given the large exposure of foreign investors to US stocks, as well as leverage and revolving financing within the AI ecosystem, the adjustment may evolve into a “global safe-haven event.” According to the report, there are opinions that due to the large scale of the US economy, the depth and liquidity of the capital market, and the status of the US dollar as a global reserve currency, US dollar assets are “irreplaceable.” However, the pillars on which the dollar's dominant asset position depends are weakening, and external trust in US fiscal and trade policies, safety and security policies, and the independence of the Federal Reserve has declined. The report points out that the US is still highly dependent on foreign capital inflows to make up for the ever-widening fiscal and current account deficits, but the huge double deficit is unsustainable. The rising debt burden is like a “time bomb hanging over the head,” and related pressures are piling up. According to the report, given the surge in net debt in US international investment positions and the high concentration of international investment position assets in other countries in the US, moderate risk reduction by foreign investors will “be enough to cause the dollar to depreciate.”