MAS reports net profit of S$20 billion driven by strong investment gains

On Tuesday, the Monetary Authority of Singapore released its annual report showing a net profit of S0 billion for FY2025/2026 — the third highest on record — driven by S9.8 billion in investment gains across bonds and equities in both developed and emerging markets. But buried in the upbeat numbers was a sobering warning from managing director Chia Der Jiun: the global AI investment boom that has powered much of this performance may not be sustainable.

MAS attributed the strong results to a resilient global economy that weathered repeated shocks and well-performing financial markets. Investment gains were partially offset by S6.4 billion in negative currency translation effects from the Singapore dollar strengthening against the US dollar and Japanese yen, along with S.4 billion in net expenses from money market operations. The board approved a S.5 billion return to the Singapore government — the first consolidated fund contribution since FY2020/2021.

Chia characterised the ongoing AI investment boom as a major uncertainty despite its near-term benefits. Hyperscalers and model builders, he noted, are now projecting investments that exceed their cashflows and commercial revenues, creating a fragile feedback loop where global growth, investment returns, and financial market performance all depend on continued data centre and semiconductor spending. If revenue growth accelerates and productivity gains materialise, the boom could extend; if monetisation falls short, a sharp retrenchment could follow.

The stakes for Singapore are particularly high. As a financial hub whose banking, asset management, and insurance sectors grew 4.3% in 2025, Singapore's economy is tightly coupled with global capital markets that are increasingly riding on AI investment sentiment. Chia flagged escalating energy and chip costs, supply bottlenecks, regulatory uncertainty, and competition from lower-cost open-weight models as risks that could derail the path to monetisation.

Why it matters for Singapore: MAS's annual report serves as a bellwether for the Singapore economy's health, and Chia's AI-specific warnings carry weight for the city-state's positioning as a regional AI hub. If the global AI investment cycle turns, Singapore's financial sector — a major employer and GDP contributor — would feel it directly. The central bank's base case is that AI continues supporting growth in the near term, but the longer-term path depends on whether the industry can find a sustainable alignment between investment and revenue. As Chia put it, the question is whether the boom is sustainable or not — and the answer will shape Singapore's economic trajectory for years to come.