Singapore sounds the alarm: the AI boom could turn into a market crisis

The Central Bank of Singapore (MAS) poured cold water on the hype surrounding artificial intelligence. In its annual financial stability report, the regulator pointed to a dangerous imbalance: valuations of tech companies, especially in the AI sector, have soared to the heavens, and investors have rushed en masse into information technology.

Where the dog is buried:

The problem is not with the AI itself, but with the expectations of it. If the market is disappointed in the ability of artificial intelligence to generate profit, a massive sell-off of stocks will occur. But this is just the beginning — a chain reaction could hit the private credit market, where there are already signs of overheating.

The icing on the cake: large tech giants are funding expansion through new private financing structures. This creates additional pressure on the revenues of AI companies and increases the risk of defaults.

The central bank pointed out the main contradiction: stock market quotes have detached from the real risks of economic downturn. Any shock could trigger a rally in the opposite direction, and then market confusion is guaranteed.