Singapore’s central bank warned that uncertainty over sustaining massive AI investments is a key risk for global growth and financial markets, citing this along with the threat of a prolonged re-escalation of the war in the Middle East. The Monetary Authority of Singapore (MAS) highlighted these dual threats in its latest assessment, emphasizing that a sudden pullback in AI-related capital expenditure could trigger market volatility and undermine economic expansion.

The regulator noted that the massive scale of current AI investments creates a concentration risk, where any reversal in sentiment could have outsized effects on asset prices and credit conditions. Simultaneously, the potential for the Middle East conflict to widen adds another layer of unpredictability to energy markets and global trade routes.

MAS’s warning reflects broader concerns among policymakers that the confluence of technological hype cycles and geopolitical instability could derail the fragile recovery in global markets.