Return on AI Investments Uncertain as Costs Mount, MAS Chief Warns
Source: The Edge Singapore
MAS Managing Director Chia Der Jiun has warned that returns on AI investments are uncertain while energy and chip costs climb, as global tech giants pour unprecedented billions into AI buildout. His remarks at the Lujiazui Forum represent one of the sharpest central bank warnings on AI over-investment risk.
Singapore's central bank chief has issued a rare direct warning that the returns on artificial intelligence investments remain deeply uncertain, even as global tech spending on AI surges to historic highs. Speaking at the Lujiazui Forum in Shanghai, Monetary Authority of Singapore Managing Director Chia Der Jiun cautioned that global economic growth and equity valuations have become dangerously reliant on the AI narrative.
Chia pointed to mounting cost pressures that could undermine the current investment thesis. "The returns on investments in AI are uncertain, while the costs of energy and chips have been climbing," he said, referencing the energy-intensive nature of AI infrastructure against the backdrop of the ongoing Iran conflict-driven energy shock. He warned that if markets collectively reassess their investment assumptions, a sharp slowdown in growth could follow.
The scale of spending he referenced is staggering. Meta alone plans to spend up to US$135 billion (S$173 billion) on AI this year — nearly double its 2025 outlay. Alphabet raised US$84.75 billion in the largest secondary equity offering in history on June 2 specifically to fund AI investments. Yet signs of strain are emerging: Uber's chief technology officer told staff the company exhausted its entire annual AI budget within four months, forcing a hard cap of US$1,500 per user per month on AI tokens.
Chia also flagged systemic concerns beyond returns. "Risks can accumulate if safety is not sufficiently safeguarded and economic benefits are not widely shared," he said, linking AI's trajectory to broader societal stability. His remarks come as Singapore's National AI Council, chaired by Prime Minister Lawrence Wong, pushes an ambitious national strategy that attempts to balance rapid adoption with the very risks Chia outlined.
Why it matters for Singapore: As a major financial hub whose sovereign wealth funds and central bank reserves are deeply exposed to global markets, Singapore has a unique stake in this debate. The MAS chief's warning — one of the most pointed from any central banker globally — signals that Singapore is thinking critically about AI's systemic risks even as it positions itself as Asia's AI hub. The tension between racing ahead and managing downside is now official policy conversation.