One-third of Singapore-listed firms at risk in severe AI downturn: MAS

The central bank expects global financial resilience to be threatened by persistently higher cost of capital

[SINGAPORE] Around 32 per cent of Singapore-listed companies will be at risk under a severe downturn in artificial intelligence-related investment and loss of revenue along the AI supply chain, a stress test by the Monetary Authority of Singapore (MAS) has shown.

These companies would account for about 16 per cent of overall corporate debt, with the increase in at-risk firms concentrated among highly leveraged, capital-intensive firms and those reliant on working capital financing.

Smaller firms were also disproportionately represented due to their lower profit margins and thinner cash buffers, MAS said in its annual Financial Stability Review released on Tuesday (Sep 22).