MAS warned uncertainty from sustained, large-scale AI investment is a key risk
to global growth and financial markets and flagged the longer-term threat of an
escalation in the Middle East conflict. The MAS governor said the recent surge
in spending on data centers, chips, compute infrastructure and semiconductor
capacity has supported global growth, and that both a continued boom and a sharp
withdrawal of funding would have material effects. A significant pullback could
materially weaken global growth; a prolonged AI expansion would influence
incomes, demand and inflation. MAS also flagged financial-stability risks from
equity, credit and loan-market exposure to unsustainable business models within
complex financing structures, which could impair cash flows and tighten credit
conditions. It said global growth, investment and market performance are now
highly dependent on expectations of continued large-scale data-center and
semiconductor investment, notably in US capital markets and in Asian
semiconductor-exporting economies.
