ANZ chief executive Nuno Matos has warned global markets face a 'dangerous situation' as the massive build-out of AI and data centres fuels an expenditure super-cycle, while he described competition for capital, high government spending, stubborn inflation and rising interest rates as a serious problem.
Giving evidence at a parliamentary inquiry in Canberra on Thursday, Mr Matos said the world had 'never saw this amount of spending in our lives' and described the unusual co-existence of record-high equity markets, driven by the tech and AI wave, and record-high interest rates as a dangerous combination.
While Mr Matos said he did not expect Australia to enter a homegrown recession, he warned a negative global shock linked to the AI build-out could cause serious economic problems for the country. 'If we have an AI, let's call it an AI blip, in the world, we will have globally a big problem. Now, do I expect that? No. But that's not impossible to happen.'
Liberal MP Simon Kennedy, deputy chair of the committee, asked Mr Matos whether government spending was too high and contributing to inflation. Mr Matos said any reduction in spending, public or private, would ease inflationary pressure, but that high inflation was a global phenomenon driven by several concurrent trends: huge investment in renewables, a surge in defence spending and the massive AI infrastructure build-out. He said governments competed fiercely for long-term capital, which added to the problem. 'Every time the administration goes to the market, they are now competing with AI infrastructure, which also demands long-term capital. This is creating inflation.'
Mr Matos also warned about the 'dark side' of AI, saying its adoption without adequate guardrails and global regulation risked fraud, scams and attacks on critical infrastructure. He called for global regulation to prevent society from getting into trouble, and noted that while past technologies had generally supported more employment, it was unknown whether AI would be different.
The chief executives of Australia's big four banks will appear before the inquiry.
Analysis
Why this matters
- Mr Matos's warning points to a potential global economic vulnerability: a correction in AI-related markets could trigger a broader crisis, affecting investments, jobs and borrowing costs.
- The intense competition for capital, as governments and AI infrastructure both seek long-term funding, is a structural driver of persistently high interest rates that directly affects mortgage holders and businesses.
- The call for global regulation of AI highlights a growing debate about the technology's potential harms, from fraud to job displacement, with implications for how rapidly it is adopted.
Background
Nuno Matos became ANZ's chief executive in July 2026, succeeding Shayne Elliott. The bank recently posted a full-year cash profit of $7.59 billion, up 31 per cent. The Reserve Bank of Australia has kept interest rates at an 18-year high, with governor Michele Bullock last week saying the RBA was not forecasting a domestic recession. The parliamentary inquiry into the big four banks is examining their operations and the broader economic outlook.
Key perspectives
- Nuno Matos (ANZ CEO): Warns the combination of AI and data-centre investment, government spending, inflation and rising rates is a 'dangerous situation' that creates an unprecedented competition for capital. He says an 'AI blip' could cause a global crisis and that widespread AI adoption without guardrails 'is a big problem'.
- Simon Kennedy (Liberal MP): Asked whether government spending was too high and contributing to inflation, suggesting a rebalancing may be needed toward private-sector-led investment.
- Ed Husic (Labor MP): Noted that everyone in Australia seems to be doing it tough except the biggest businesses, and pressed Mr Matos on the bank's profit increase.
What to watch
- Whether the RBA signals any change in its interest-rate stance at its next meeting, given the competition-for-capital dynamic Mr Matos described.
- Any signs of a correction or slowdown in AI-related investment that could trigger the negative global shock Mr Matos warned about.
- Progress on any global regulation of AI, which Mr Matos argued is needed to mitigate risks from fraud to job losses.
Checked
12 claims in this story checked against 1 source: 10 supported.
Show each claim
- Partly supportedMatos warned that global markets face a “dangerous situation” amid an AI-driven capital race and high interest rates.Just In: “He says the combination of that race for capital, the prevailing level of government expenditure, higher and stubborn inflation and rising interest rates are a serious problem. [...] "It's a dangerous situation for the world."”
- SupportedMatos told the inquiry that AI infrastructure spending, government expenditure, inflation and rising interest rates are contributing to competition for capital.Just In: “"Globally, undoubtedly, the combination of those four factors, and Australia is not different in that regard," he said today. "They are contributing to a competition for capital."”
- SupportedThe AI and data-centre build-out is feeding an expenditure super-cycle.Just In: “Nuno Matos, ANZ's chief executive, says the competition for capital is intense globally, driven by the AI and data centre build-out, which is feeding an expenditure super-cycle.”
- SupportedMatos said equity markets were at record highs because of the tech and AI waves, while interest rates were also at record highs, calling the situation dangerous.Just In: “"We have a very curious situation in the world where we have equity markets at record highs, basically because of the tech wave and basically because of the AI wave, but at the same time you have record highs of interest rates. "It's a dangerous situation for the world."”
- SupportedMatos said he did not expect Australia to enter a homegrown recession.Just In: “Mr Matos said he did not think Australia was heading for recession.”
- SupportedMatos warned that a negative global shock linked to the AI build-out could cause serious economic problems for Australia.Just In: “Mr Matos said it was possible that Australia could be hit by a negative global shock, linked to the AI build-out and intense global competition for capital, which would cause serious economic problems in Australia.”
- SupportedMatos said an AI “blip” could cause a global problem, although he did not expect it and said it was not impossible.Just In: “"If we have an AI, let's call it an AI blip, in the world, we will have globally a big problem. "Now, do I expect that? No. But that's not impossible to happen."”
- Partly supportedMatos described high government spending as part of a serious problem alongside competition for capital, stubborn inflation and rising interest rates.Just In: “He says the combination of that race for capital, the prevailing level of government expenditure, higher and stubborn inflation and rising interest rates are a serious problem.”
- SupportedMatos said high inflation was a global phenomenon linked to investment in renewables, defence spending and AI infrastructure.Just In: “But he said high inflation was a global phenomenon at the moment and it was the consequence of several trends. He said the huge global investment in renewables, the huge growth in defence spending, and the massive spend on AI infrastructure were creating large capacity pressures for economies.”
- SupportedMatos said any reduction in public or private spending would ease inflationary pressure.Just In: “Mr Matos said any spending reduction in the economy, "public or private", would take pressure off inflation.”
- SupportedMatos warned that AI without adequate guardrails and global regulation could be used for fraud, scams and attacks on critical infrastructure.Just In: “"AI can be used maliciously to [commit] fraud, to defraud customers, to scam customers, to impact critical infrastructure, being bank infrastructure, public infrastructure. That's very obvious." [...] "Which means that going into a wide adoption of AI without having the adequate guardrails, it's a big problem."”
- SupportedMatos said it was unknown whether AI would have a different employment impact from past technologies.Just In: “"In the past, all technologies that were found in the world actually supported more employment and more growth. Until today, that has been the trend. The question is if AI will be different"”
