MAS Chief Warns Rising AI Costs Could Weigh on Investment Returns

Monetary Authority of Singapore (MAS) Managing Director Chia Der Jiun warned that rising costs of energy and chips powering artificial intelligence could weigh on investment returns, speaking at the Lujiazui Forum on June 17. His remarks add a cautionary note to the AI investment frenzy that has driven global equity markets and Singapore's export figures through the first half of 2026, highlighting what he described as a precarious balance between climbing input costs and uncertain payoffs.

Chia noted that accelerating AI spending has been a significant driver of global demand throughout 2024 and 2025, creating a positive demand shock that boosted Singapore's technology exports. However, he cautioned that global economic growth and equity market valuations are now highly reliant on continued AI investment momentum. If market participants reassess their assumptions about AI returns, the slowdown or reversal could be sharp. He also flagged medium-term structural risks: AI safety may not be adequately addressed, and the economic benefits of AI may not be widely shared, potentially exacerbating inequality.

The warning carries particular weight coming from Singapore's central bank chief, given the city-state's outsized exposure to AI-driven trade flows. Singapore's non-oil domestic exports surged 38.4% in May 2026, driven largely by AI-related electronics and semiconductor shipments. An AI investment pullback would ripple directly through Singapore's manufacturing and trade-dependent economy. Chia's remarks also echo concerns from other central bankers about the gap between AI infrastructure spending and measurable productivity gains — a gap that MAS is watching closely as it calibrates monetary policy.

Why it matters for Singapore: No other Southeast Asian economy is as exposed to AI investment cycles as Singapore. The MAS chief's warning is a signal that policymakers are aware of the concentration risk — too much of Singapore's recent export growth depends on AI hardware demand that could reverse if the ROI math doesn't hold up. For businesses and investors in Singapore, this means diversification away from pure AI infrastructure exposure is becoming a strategic imperative, not just a risk-management checkbox.