87% of the market contacts the NY Fed surveyed now cite AI as a potential shock to the US financial system over the next 12 to 18 months.

87% of the market contacts the NY Fed surveyed now cite AI as a potential shock to the US financial system over the next 12 to 18 months. In the spring survey, that share was 50%.

The details come from the Fed's semiannual Financial Stability Report, released Friday. The NY Fed polled 23 people at broker-dealers, banks, investment funds and advisory firms in September and October.

Their AI worries are specific: elevated equity valuations, AI-enabled cyberattacks, and complex financing tied to data-center investment, which one outlet described as increasingly circular. On top of that sits the risk of a broad market correction if AI-sector earnings disappoint.

For context, the next most-cited risks were a correction in risk assets generally at 52% and higher long-term interest rates at 48%. AI sits well above both. The Fed notes the survey reflects respondents' views, not those of the Board or the NY Fed.

The timing stands out to me. The report lands the same week Jensen Huang resigned as Nvidia's CEO, with CFO Colette Kress stepping in as interim CEO while the board weighs a permanent successor. The survey was taken before that, so it isn't a reaction to it.

The financing piece is what I'd watch most closely, because circular arrangements tend to look fine right up until the earnings stop cooperating. My question: when the people closest to the money go from split to near-unanimous in flagging AI across two surveys, how much of that concern is already priced in, and how much is still waiting to show up?

Sources:
CNBC: https://cnbc.com/2026/11/13/ai-risks-financial-system-federal-reserve.html
Reuters (via Bradenton Herald): https://www.bradenton.com/news/business/article318069496.html
Fidelity/MT Newswires: https://www.fidelity.com/news/article/default/202611131852MIDNIGHTUSEQUITY_A3754242

Not financial advice. For informational and educational purposes only.