The Federal Reserve's semiannual financial stability report released Friday revealed that 87% of survey respondents identified artificial intelligence as a "significant risk" to the financial system, up sharply from 50% in the spring survey. The figure far exceeded the second-ranked concern, asset price corrections, at 52%. Respondents cited elevated equity valuations tied to AI, cybersecurity threats posed by frontier AI models, and complex AI-related financing structures as primary concerns. The report also flagged that hedge fund leverage has reached its highest level since 2013.