The AI bet is running straight into a capital crunch
DBS’ Tan Su Shan, the CEO of Singapore’s largest bank, sees a vibe shift, with investors starting to question AI returns.
A looming capital crunch is threatening the AI buildout currently facing chip, power, and material shortages, according to Tan Su Shan, CEO of Southeast Asia's largest bank. At a Semafor World Economy Global Leaders Dinner in Bangkok, Tan warned that lenders are beginning to demand real returns from AI investors, signaling an end to the current boom.
DBS Group CEO Hock Tan echoed this sentiment, comparing AI investors to gamblers and expressing concern about the market's irrationality. While global investors may be okay for the next two years, Tan cautioned that the market will soon question the returns on AI investments. The US capital markets have historically been able to secure investments for growth companies, regardless of their losses, but the market is now adjusting.
Private credit markets are also reacting, and Tan expressed hope for an equilibrium. DBS has been early adopter of AI in its wealth advisory services, and while some customers may build their own agents, Tan believes that being embedded in the customer journey is crucial.
Written by urgent.news from Semafor's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
