As AI bubble fears grow, can Singapore withstand a sharp market correction?
Certain sectors such as semiconductor and electronics manufacturing may be impacted, but overall, Singapore's diversified economy offers some resilience against potential shocks.
Office workers walking on the streets of the Central Business District. (File photo: iStock)
Listen
7 min
Abigail Ng
14 Nov 2025 06:00AM (Updated: 14 Nov 2025 07:48AM)
BookmarkShare
Read a summary of this article on FAST.
FAST
SINGAPORE: Singapore's economy will inevitably feel some effects if the artificial intelligence (AI) bubble bursts, but it remains diversified enough to be resilient, analysts told CNA.
This is despite the country's significant exposure to the AI boom through its sizeable semiconductor, data centre and tech industries, they said.
ADVERTISEMENT
Earlier this month, the Monetary Authority of Singapore (MAS) warned that some stock valuations in the technology and AI sectors seemed “relatively stretched”.
In its 2025 financial stability review, MAS noted that some firms had used "novel and potentially circular private" financing arrangements to expand and may face intensifying pressure to generate sufficient revenue.
MAS' comments spotlighted the global concerns of an ongoing AI bubble and speculation that the bull market in tech stocks may not last.
Related:
If optimism about AI’s ability to generate sufficient returns fades, there may be sharp corrections in the broader equity market, said MAS.
“The materialisation of this risk could be exacerbated by the build-up of leverage, with spillovers to economic growth,” the review said.
Nearly 500 AI start-ups are active in Singapore, and
the country secured US$1.31 billion in private AI funding from July last year to June this year, a report earlier this week revealed.