DBS CEO Tan Su Shan said financial markets are reassessing the risks associated with AI investments, a shift that could bring greater discipline to AI financing.
Speaking to Bloomberg Television on 12 October, Tan said investors are demanding higher returns and examining financing structures more closely.
“The market has spoken,”
she said.
“It’s not a bad thing because now, people are asking for higher returns, and people are also looking at structures.”
According to Tan, investors want assurance that spending on AI infrastructure will generate sufficient long-term returns to repay lenders and bondholders while providing returns to equity investors.
She warned that financially weaker companies could face credit rating downgrades as markets reassess their exposure to AI-related investments.
However, Tan described the repricing as healthy, as investors seek to ensure that large financial commitments remain sustainable.
DBS AI financing centres on hardware
DBS has originated approximately S$25 billion in AI-related financing deals so far this year, according to Tan.
The bank frequently acts as lead manager for syndicated loans, which involve multiple lenders jointly providing financing, while retaining only a small portion of the loans on its own books.
Most of the financing supports hardware infrastructure, including semiconductors, memory chips and data centres.
The developments come as major technology companies invest billions in AI infrastructure, while stock market gains remain concentrated among a handful of companies.
Rising interest rates and higher bond yields have also increased the cost of financing large-scale AI infrastructure projects.
PwC estimates that cumulative data centre spending across Asia-Pacific could reach US$8.2 trillion by 2050.
Rate volatility and geopolitical strain
Tan made the remarks on the sidelines of a DBS conference focused on AI and geopolitical developments.
During her opening remarks, she highlighted significant interest rate volatility and sharp fluctuations in AI-related stocks, which have contributed to uncertainty among equity investors.
She also expressed concern about escalating conflicts in the Middle East and those involving Russia, citing growing geopolitical tensions as another source of pressure on financial markets.
“Frankly, I find it exhausting just to look at so much tension and so much stress in the system,”
she said.
DBS begins seeing results from AI projects
Tan has made AI a key priority since becoming DBS CEO in March 2025.
Global Finance named DBS the World’s Best AI Bank for 2025, recognising its adoption of AI across its operations.
According to Tan, the bank is beginning to see results from major AI initiatives aimed at improving internal workflows and processes.
These include growth in fee income and faster account openings, although she did not disclose specific figures.
Separately, Tan said DBS’s wealth management business continues to benefit from long-term trends, including rising wealth creation in Asia, deepening capital markets and intergenerational wealth transfers.
While market volatility may affect short-term fund flows, she said growth in net new money has remained consistently strong.
Featured image credit: Edited by Fintech News Malaysia, based on image by georgejmclittle via Magnific
