Methodology
The AI Systemic Risk Index tracks whether the AI investment boom is becoming a meaningful risk to the economy, markets, credit system, business investment, and physical infrastructure.
Risk Bands
0–19
20–39
40–59
60–79
80–100
Six Components
Demand / ROI
Are businesses and consumers generating enough real economic value from AI to justify the spending going into it?
- Weak monetization
- Slowing adoption
- Poor realized returns
- Spending outrunning economic value
CapEx Sustainability
Can companies continue funding AI infrastructure, chips, data centers, and related investment without materially weakening cash flow, balance sheets, or returns?
- Deteriorating free cash flow
- Weakening capital efficiency
- Spending without corresponding revenue or returns
Financing / Credit
Is AI investment becoming more dependent on debt, private credit, structured financing, or funding that could transmit stress into the broader credit system?
- Higher leverage
- Wider spreads
- Refinancing strain
- Opaque financing structures
Market Concentration / Valuation
How much market value and investor exposure are concentrated in a relatively small group of AI-linked companies, and how stretched are expectations relative to fundamentals?
- Greater index concentration
- Demanding valuations
- Crowded positioning
Physical Infrastructure
Are power, grid capacity, data-center construction, chips, cooling, water, or other physical constraints creating meaningful economic or financial pressure?
- Power shortages
- Grid and permitting delays
- Construction bottlenecks
- Rising infrastructure costs
Macro Spillover
Are AI investment and financing conditions beginning to materially affect employment, inflation, business investment, productivity, GDP, or the broader economy?
- Hiring effects
- Inflation pressure
- Capital-spending spillovers
- Defaults or broader financial-condition stress
How Scores Change
Scores move when new evidence materially changes the assessed risk, not simply because a topic appears in the news. Ordinary day-to-day volatility does not automatically change a component or the headline index.
Source Hierarchy
Primary sources are preferred wherever practical: company filings and investor relations, Federal Reserve and government data, credit and market data, then high-quality financial reporting and reputable industry research.
Cross-Cutting Risk
Geopolitical and regulatory developments are treated as cross-cutting factors because they can affect several components simultaneously rather than forming a standalone seventh category.
Versioning
Methodology changes are documented. Historical score records are preserved rather than silently rewritten.