Moody’s warns banks could become dependent on a small group of AI suppliers

Moody’s has warned that banks racing to adopt artificial intelligence may become reliant on a narrow set of Silicon Valley suppliers, increasing their exposure to service failures and pricing pressure. The agency said the shift could affect major lenders in the City of London and on Wall Street.

In a note reported by the Guardian, Moody’s said AI should eventually help financial firms cut costs and lift revenue, but only after substantial investment. It argued that the benefits would come with new operational and commercial risks as banks hand more core functions to outside technology providers.

The warning adds to wider concern among businesses about dependence on US technology. A separate report from The Register said many European companies fear a possible American “kill switch” on key services, although fewer than half regularly test backup plans.

Other recent coverage has highlighted how quickly AI is spreading into workplaces and public services, from tech companies’ own staffing pressures to efforts by city governments to use software to improve operations. The latest warnings suggest the financial sector is among the most exposed as firms embed AI deeper into daily work.