The Monetary Authority of Singapore (MAS) Managing Director Chia Der Jiun has flagged the risk that global growth could become too narrowly driven by AI if gains remain concentrated among a small group of companies and sectors.
Speaking at the UBS Asian Investment Conference, Singapore Wealth Edition, Chia pointed to AI as one of the main forces supporting investment, market optimism and global growth this year.
He noted that AI-related investment contributed most of US investment growth and half of US GDP growth, while AI-related stocks drove most of the market’s gains.
Asia has also benefited from the AI boom. Taiwan and South Korea have recorded strong export growth on the back of rising demand for semiconductors.
However, Chia said the momentum around AI also comes with risks.
He noted that the current boom has been driven by a race to scale and develop self-improving AI models, supported by relatively easy financing and strong hyperscaler cashflows.
That race has increased demand for chips, energy and computing capacity, pushing up the unit cost of compute.
Chia warned that the AI race could slow if investors begin to question whether the returns can justify the rising cost.
He also pointed to possible risks from technological obsolescence or regulatory intervention.
AI-Led Growth Raises Concentration Concerns
A wider concern is whether AI-led growth will spread across the broader economy.
Chia raised the risk that productivity gains from AI may not be widely distributed, particularly if the benefits remain concentrated among a small group of companies and sectors.
If wages and employment do not capture a fair share of the benefits, he said,
“This may mean high growth, but not balanced growth.”
For Singapore, MAS is placing greater emphasis on preparing the financial sector workforce for AI.
For Singapore, Chia said MAS is placing greater emphasis on upskilling the financial sector workforce in collaboration with the Institute of Banking and Finance and the industry.
“A priority now is to accelerate the equipping of our financial workforce with skills to work with AI,”
Chia said.
He framed this as one of the core foundations supporting Singapore’s position as a trusted financial centre, alongside risk-proportionate regulation, innovation and partnership with industry.
Chia also pointed to Singapore’s strengths in wealth and asset management, foreign exchange, banking, insurance, reinsurance, payments and fintech.
He added that Singapore’s financial centre is among the leaders in AI adoption.
MAS has also supported AI adoption in finance through broader innovation initiatives, alongside work in fintech, sustainable finance, tokenisation and digital assets.
Chia said policy responses will be important as countries navigate these risks, including efforts to strengthen workforce adaptability, support vulnerable groups and develop more diversified sources of growth.
Featured image: Edited by Fintech News Singapore, based on image by MAS via LinkedIn