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MAS Warns AI Costs May Hit Investment Returns

By Varun MittalMAS Warns AI Costs May Hit Investment Returns

MAS Chief Chia Der Jiun warns rising AI energy and chip costs could impact investment returns, despite AI’s economic boost in 2024-2025. Learn about the risks.

MAS Warns AI Costs Threaten Returns

The Monetary Authority of Singapore (MAS) Managing Director, Chia Der Jiun, has cautioned that the escalating costs of energy and chips vital for artificial intelligence (AI) could negatively impact investment returns.

Speaking at the Lujiazui Forum on June 17, Chia highlighted concerns over the sustainability of current AI investment trends.

Key Concerns on AI Investment

  • AI spending has positively impacted the global economy in 2024 and 2025 by stimulating demand.
  • However, an increasing reliance on AI could expose financial markets and economic growth to instability.
  • This risk intensifies if initial investment assumptions are re-evaluated due to rising expenses for energy and semiconductor chips.
  • Chia also pointed to medium-term risks, including unresolved AI safety issues and the need for equitable distribution of AI’s economic benefits across society.

Future Outlook

The warning underscores a growing sentiment among financial regulators about the potential downsides of unchecked AI expansion. The focus now shifts to how these rising costs and inherent risks will influence future investment strategies and economic stability.

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