ECB Research: Even If AI Meets Expectations, US Tech Stocks Could Correct, Threatening Euro Area

European Central Bank economists have warned that even if AI ultimately delivers on all its promises, a correction in US tech stocks could still be inevitable. The core logic is that technological success would instead spread risk from the corporate level to the broader economy, raising an unhedgeable systemic risk premium and suppressing valuations. The euro area would not be immune either, and the current policy response space is far less ample than during the bursting of the internet bubble.