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Southeast Asia among most vulnerable to potential collapse in AI boom - BusinessWorld Online
AMRO said a sharp AI correction could cut export revenues, investment and growth as the region accounts for two-thirds of global AI-related trade growth.
- On Monday, the Asean Macroeconomic Research Office warned that Southeast Asia, China, Japan, and South Korea are "particularly exposed" to a potential collapse in the artificial intelligence boom.
- The region sits at the center of global AI supply chains and is "increasingly integrated into AI-related financial markets," making it vulnerable if demand falls short and capital spending retracts.
- AMRO identified risks including high tech valuations, circular financing deals, and heavy market concentration in South Korea, where equity markets are sensitive to price corrections in AI-related assets.
- A disorderly correction could trigger shocks across the broader financial system, potentially causing lower technology exports, portfolio losses, capital outflows, and refinancing pressure on leveraged technology and infrastructure firms.
- Officials at the Bank of England and the Monetary Authority of Singapore have questioned the sustainability of massive AI investments amid stiff competition and higher borrowing costs.
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Asia Economies Among Most at Risk From any AI Correction, Researchers Warn
Southeast Asia plus China, Japan and South Korea are more at risk than most economies to any potential collapse in the artificial-intelligence boom, which could trigger shocks across financial markets and the real economy.
·New York, United States
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AI investments have become one of the main engines of Asian growth. According to AMRO, if global technology investment slows, ASEAN+3 growth could decline from 4.1 percent to 2.6 percent in 2027, while exports and markets could also be pressured. 🚆
CryptoTendence Banks in Asia finance chips for AI data centers while high cost, obsolescence and future demand raise risk. Banks finance AI chips in Asia and open a new credit risk front was first published in CryptoTendence.
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