Taiwan Central Bank Chief Warns AI Borrowing Could Inflate Bubble as Nvidia Nears $5 Trillion
Updated
Updated · Barchart · Jul 12
Taiwan Central Bank Chief Warns AI Borrowing Could Inflate Bubble as Nvidia Nears $5 Trillion
1 articles · Updated · Barchart · Jul 12
Summary
Yang Chin-long said AI-driven growth is real, but heavy borrowing by technology companies to fund AI investment could create an unsustainable bubble if left unchecked.
Taiwan's warning matters because the island sits at the center of Nvidia's supply chain through TSMC, even as Jensen Huang expands local partnerships and an AI supercomputer project there.
Nvidia's latest results still show little demand slowdown: fiscal Q1 revenue jumped 85% to $81.6 billion, and the company guided for about $91 billion in Q2.
The caution lands as investor enthusiasm has already cooled—Nvidia shares have fallen 11.2% from their May 14 record of $236.54 amid valuation, competition and AI-spending sustainability concerns.
Wall Street remains broadly bullish despite those risks, with 43 of 49 analysts rating Nvidia a Strong Buy and an average price target implying 44.1% upside.
As tech giants' AI spending depletes their cash, is a 2027 financial crisis inevitable?
Is the AI boom creating real economic value or just the next dot-com bubble?
Can the U.S. power grid actually support the AI revolution's massive energy demand?
Taiwan’s 2026 AI Surge: Central Bank Flags Bubble Risk as Exports Jump 50% and Wealth Gap Widens
Overview
In June 2026, Taiwan's central bank governor warned lawmakers about the risk of an 'AI bubble,' highlighting that while AI is a real growth engine for Taiwan's economy, speculative capital spending and aggressive borrowing in the tech sector could lead to dangerous over-expansion. Taiwan's pivotal role in the global AI supply chain, anchored by TSMC and its supply to major companies like Nvidia and Apple, has fueled rapid economic growth and soaring stock markets. This situation positions Taiwan as a leading example for how central banks worldwide might monitor and respond to technology-driven asset price increases.