Singapore Financial Regulator Warns AI Companies Are Overvalued

The Monetary Authority of Singapore (MAS) has expressed concerns over inflated valuations in the artificial intelligence (AI) sector, highlighting that many tech companies are trading at unsustainable levels. In its annual Financial Stability Review, the MAS indicated that much of the recent growth in equity markets has been fueled by AI investments, heightening investor exposure to potential corrections. OpenAI's valuation has surged to $500 billion, with aims for $1 trillion, while Anthropic's value ballooned from $60 billion to $170 billion in just months. The MAS cautioned that some tech firms are using opaque financing structures that mask true financial health, which could amplify risks. Analysts likened the current situation to the late-1990s dot-com bubble, warning that the optimism surrounding AI may not be matched by real productivity gains. Experts argue that failure to deliver on revenue expectations could lead to financial strain within these companies, potentially uncovering underlying challenges as investor sentiment shifts. The MAS reiterated the need for responsible financial practices and clearer data handling in the rapidly evolving AI landscape.

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